For anyone doubting the value on offer in UK markets, this week’s takeover frenzy might provide pause for thought.
The boards of FTSE 100 testing and certification company Intertek (LON:ITRK) and FTSE 250 healthcare group Spire Healthcare (LON:SPI) both indicated that they would recommend takeover offers received last week if they were made firm.
On Thursday, ingredients specialist Tate & Lyle (LON:TATE) received a cash offer from US-based trade rival Ingredion (NYQ:INGR). Although Tate’s board has not yet said whether it would support the deal, I suspect they might do.
Also on Thursday, the Financial Times published a detailed article on Thursday suggesting Legal & General (LON:LGEN) could become a bid target for US asset management giants.
In each of the first three cases these offers appeared to provide an attractive premium to the undisturbed price prior to the bids becoming public:
Intertek’s board would be prepared to support a £60 offer from Swedish private equity group EQT (59% premium)
Spire Healthcare’s board has indicated they would support a 250p per share offer from long-time shareholder Toscafund, even though Toscafund opposed a 250p offer back in 2021! (67% premium)
Tate & Lyle: the former sugar firm’s board has not yet commented on the 595p per share offer from US rival Ingredion, but the two companies are in discussions (59% premium)
But a broader look at the share price charts for each company suggests an element of opportunistic timing:
Will we see more takeover offers over the coming weeks? I wouldn’t bet against it. With UK investors seemingly reluctant to back domestic businesses, private buyers will inevitably step in where they see value and opportunity.
Geopolitical uncertainty doesn’t seem to be deterring investors from deploying fresh powder. That’s probably just as well, because the macro situation remains uncertain both at home and in the Middle East.
Here in the UK, Labour rivals to Prime Minister Keir Starmer continue to manoeuvre against him, with the focus currently on Manchester mayor Andy Burnham.
However, bond investors view Starmer and Chancellor Rachel Reeves as more disciplined on spending than Burnham. As a result, they’ve pushed up UK government borrowing costs in recent days, with the 10-year gilt yield now…
