UK Listed Takeovers Increasing at Pace

In 2024, UK takeover activities saw a significant uptick, with a total of £49 billion in recommended bids. This marks a substantial increase from £17.2 billion in 2023. The average deal value also surged, reaching £1.07 billion, nearly triple the previous year's £390 million. This rise in takeover activities primarily targeted major indices, including the FTSE 100 and FTSE 250, reflecting a growing trend of strategic acquisitions.

A majority of the takeover bids were aimed at substantial companies, with five FTSE 100 companies and 19 FTSE 250 index stocks receiving bids. Most of these acquisition attempts were successful. The nature of these deals varied, with many being all-cash offers. Only eight deals were a combination of shares and cash, while three were structured as all-share deals. The average bid premium, however, saw a slight reduction to 45% compared to 2023.

This increase in acquisitions was driven by a perceived undervaluation of UK companies, attracting bidders looking for strategic investments. Noteworthy takeovers included Carlsberg's acquisition of Britvic, aimed at bolstering its footprint in Western Europe, and ABC Technologies' purchase of TI Fluid Systems.

Despite the high number of successful takeovers, 15 UK-listed companies resisted acquisition attempts. Notable among these challengers were Anglo American, Rightmove, and Currys from the FTSE 100. Such resistance to bids resulted in a re-evaluation of stock values, with these companies observing an increase in their trading multiples.

The heightened level of takeover activity has led to considerable discussions amongst market watchers. These trends are reflective of the broader perceptions within the investment community regarding the value of UK enterprises. The recent spate of acquisitions has prompted a reassessment of how these companies are valued, potentially recalibrating market expectations and underscoring the dynamic nature of the UK's financial markets.