Britain faces a swarm of takeover bids this new year: one in three AIM shares at risk, says investment bank Peel Hunt
Britain’s business community faces ‘a swarm of takeovers’ next year, with a third of AIM companies vulnerable to bids, according to City experts.
In a stark warning, investment bank Peel Hunt predicted a “large and sustained” wave of offers for London-listed companies in the new year.
And it warned that there were ‘barbarians at the gate’, a reference to the bitter takeover battle over US conglomerate RJR Nabisco – the maker of Camel cigarettes and Oreo biscuits – which was the subject of a book and film.
The warning comes after a mass exodus from London’s stock market that has left the city reeling.
Figures this week showed the biggest net loss of companies from the UK stock market since 2009, with 88 companies leaving and just 18 joining.
Companies have stopped listing on rival stock exchanges such as New York, or have been delisted after being picked up through takeovers.
Corporate Greed: James Garner starred in the 1993 Barbarians at the Gate film about the bitter takeover for American conglomerate RJR Nabisco
City grandees have called on the government to scrap stamp duty on London-listed shares.
Richard Wilson, CEO of Interactive Investor, said yesterday that the 0.5 percent levy was the ‘elephant in the room’. “We are charging the British stock exchange with the end of its existence,” he said.
But 2025 will be difficult, according to Peel Hunt, with a “wave of demand approaching the shores of Britain” from both strategic and private equity buyers.
“Our coastal defenses feel weaker than ever,” the bank warned.
Michael Nicholson, head of mergers and acquisitions at Peel Hunt, added: ‘It seems certain that 2025 will bring a large and sustained flow of UK acquisitions.
“Bid defense manuals are no longer something you can leave on the shelf. They should be front-of-mind for all boards.’
Shares on London’s junior market AIM are particularly at risk of takeovers in 2025, the report said. Up to a third of small and medium-sized AIM companies could be closed down.
They are vulnerable due to a lack of liquidity, low valuations and a reduced ability to use capital markets.
The reduction in tax incentives to invest in AIM in Chancellor Rachel Reeves’ budget only serves to fuel the headwinds facing the sector.
By 2024, one in 20 British listed companies would be taken public, Peel Hunt found.
Major deals include the takeover of Royal Mail owner International Distribution Services, the merger of packaging giant DS Smith with a US rival and GXO’s purchase of logistics company Wincanton.
But some boards defended low bids. And while bidders are approaching shareholders directly, they have largely failed to be completely hostile.
“Some institutions have taken it upon themselves to become staunch defenders against the cheap sale of UK plc,” Peel Hunt said.
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