Hello Rainmakers,
It’s an unedifying thought, but with a large plate in hand, private equity and big corporates are queuing up to gorge themselves on yet more UK stock market companies, with what one commentator describes as being like hungry customers at an all-you-can-eat buffet.
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There was a return to school feel as the markets opened on Tuesday morning after the August bank holiday.
But it was clear that plenty of hardy investment bankers hadn’t in fact been slapping on the factor 50 in Majorca or Miami, but had been grafting away on bids for a rich range of the UK’s unloved stock market listed businesses.
This isn’t just the cycle of business life either, the departees aren’t being replaced as new listings have fallen by nearly two thirds since 1997. Since 2016, 213 companies have left the LSE. AIM has lost more than a thousand companies since 2007 and now sits at a twenty-year low.
On Tuesday the board of Macclesfield-based heat treatment and specialist thermal processing services company Bodycote unanimously recommended shareholders to accept a £1.6bn takeover deal for the group by private equity business, Veritas Capital Fund Management through its Vulcan Alpha Bidco vehicle.
Bodycote’s board were likely to be joining a steady exodus from the London Stock Exchange over the last year, which includes the following.
Intertek: The lab testing group agreed to a £10bn takeover by a consortium led by EQT.
Schroders: The historic asset management group agreed to a £9.9bn takeover by a US investor.
Beazley: The specialist insurer agreed to an £8bn takeover by Zurich.
easyJet: Agreed to a £5.7bn takeover by US private equity firm Apollo.
Segro: The warehouse landlord agreed to a £14bn takeover by Prologis.
ITV: Agreed to sell its broadcasting and streaming business to Comcast.
On top of all that, also on Tuesday, the board of Scottish energy business Capricorn switched its takeover recommendation from one suitor, Genel Energy, to DNO.
It was Russ Mould, investment director at Manchester-based investment platform AJ Bell, who was quick out of the blocks to describe the feast thus: “Overseas acquirers continue to feast on the UK market like hungry customers at an all-you-can-eat buffet.”
Bodycote had successfully rebuffed interest from Apollo earlier this year, but it appears that the board has finally conceded defeat as this initial takeover saga flushed out subsequent interest from two private equity groups in CVC and Veritas.
