A South African stock exchange is in talks with a private equity firm to develop a product that would enable investors to continue trading in listed companies after a buyout. The move addresses fears that too many public-to-private deals could reduce the attractiveness of stock markets.

The plans for a formalised "stub equity" product came as Denmark's High Court ruled yesterday that attempts by a private equity consortium to fully delist Danish telecommunications group TDC in Europe's biggest buyout were illegal, meaning a portion of the company's shares will remain publicly traded.