The possibility – or probability – of the UK experiencing an M&A wave has been discussed for some time. Relative to most markets the UK is cheap – in fact it’s been underperforming for the last five years. Sterling weakness doesn’t help but the impression is that CV19 has put many would be acquirers off because they can’t figure out what the future looks like. Despite everything corporate raiders are human too, you know … well, sort of.
However, there have been stirrings of corporate activity – the bid for Rsa Insurance (LON:RSA), the (lowball) offer for Codemasters Group (LON:CDM) and a few others. It feels like there could be a lot of takeovers happening in the near future.
I’ve been buying Itv (LON:ITV) with this in mind. As a trading opportunity it’s struggling with advertising revenue and the change in the way that people – especially young people – consume content (aka streaming) but as an asset for any one of the production or content companies out there it looks like a startlingly cheap way of getting your hands on a massive library plus ITV Studios.
I also fancy M&g (LON:MNG) and Pearson (LON:PSON) as targets – the latter is simply dirt cheap compared to other asset managers, while the latter looks a sitting duck due to its struggles to convert its educational content into an effective digital offering. On that note it looks like they’re getting near an inflection point but there must be a lot of frustrated holders out there who’d welcome being put out of their misery.
Anyway, does anyone have any better – or at least different – ideas?
