Two more firms are set to leave the London stock market after succumbing to takeover bids, as Britain emerges as the top dealmaking destination in Europe.
FTSE 250 scientific testing kit maker Spectris yesterday accepted a £4.4billion bid from US private equity group Advent International in the biggest takeover deal in the UK this year.
But buyout giant KKR is now mulling a rival offer that could spark a bidding war.
Spectris shares rose 15.7 per cent, or 516p, to 3798p and are now up 86 per cent since it emerged as a takeover target early this month.
And in a second deal announced yesterday, the GP surgery owner Assura snubbed KKR to back a higher £1.8billion bid from competitor Primary Health Properties.
The deals fuelled fears about an exodus from London’s shrinking stock market amid a frenzy of takeover activity.
Deals: FTSE 250 scientific testing kit maker Spectris yesterday accepted a £4.4bn bid from US private equity group Advent International in the biggest takeover deal in the UK this year
It came as a report by law firm White & Case showed there have been 1,207 deals involving UK firms this year, worth a total of £88.7billion – 52 per cent up compared to a year earlier.
In total last year there were 3,486 deals worth £185billion. The stage is now set for more in the weeks ahead, the report said.
Already this month, microchip designer Alphawave agreed a £1.8billion takeover by US software giant and Nvidia rival Qualcomm.
In the last few months, ready meal maker Greencore has bought food manufacturer Bakkavor for £1.2billion and Dowlais, the car parts arm of GKN, was snapped up for £1.1billion by American Axle and Manufacturing.
US food delivery giant DoorDash bought UK rival Deliveroo for £2.9billion.
Russ Mould, investment director at AJ Bell, said: ‘The fact we’ve got two bid battles in Spectris and Assura goes to show how the UK stock market continues to be on sale.
If investors don’t recognise the good value opportunities on offer, trade buyers or private equity firms will keep swooping.’
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘Spectris is a prime example of a great British engineering firm, with global reach.
There will be disappointment that instead of pursuing further growth as a listed entity, it looks like it will be snapped up by American investors with deeper pockets to push its growth prospects.’
Slump: Chancellor Rachel Reeves (pictured) is under mounting pressure to breathe life back into the London market, boosting the wider economy in the process
Chancellor Rachel Reeves is under mounting pressure to breathe life back into the London market, boosting the wider economy in the process.
Advent has offered £37.63 per Spectris share, valuing the deal at around £4.4billion. Spectris chairman Mark Williamson said the offer ‘recognises the attractiveness’ of the business and will ‘benefit Spectris’s stakeholders’.
Advent managing partner Shonnel Malani said the deal is a ‘vote of confidence in British engineering and innovation’.
He was the mastermind of Advent’s controversial takeover of the British defence giant Cobham for £4billion, completed in 2020.
Since then, Cobham’s operations have been sold piece by piece to international buyers, leaving it with no manufacturing in the UK.
The Spectris takeover deal could yet be derailed by a competing bid from the private equity giant KKR, which commented yesterday that it was ‘actively engaged in the advanced stages of due diligence and arranging financing commitment’.
Mould said: ‘KKR needs to get its skates on if it is serious about wanting to buy Spectris.
‘Having been beaten by Primary Health Properties in the race to buy Assura, KKR won’t want to lose a second takeover battle in the same day.’
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