‘Sh*tloads to come’: London takeover spree set to accelerate

At a gathering of some of London’s top bankers in Canada last week, the mood was one of uncertainty. 

On the one hand, London’s dealmakers are not in want of work. In the past two weeks alone Easyjet has opened the door to an approach from American private equity firm Castlelake, Ramsdens agreed to a takeover by US rival Firstcash and FTSE 100 Segro rejected a £12.6bn approach from Californian real estate investor Prologis.

The value of agreed takeovers of London-listed firms this year now sits at $34.8bn, according to data from LSEG, nearly double that of the take-privates across the entirety of last year. Combined with a dearth of new firms coming to market, the takeover spree is proving a hard thing to celebrate for City bankers.

“There was a sense of ‘is this good?’,” said one banker. “It’s all well and good selling the family silver. But not if you’ve got no way of rebuilding the wealth.”

The London Stock Exchange has been drained in recent years by a raid on its listed firms and a drought of new companies listing. And while the number of bids on listed firms is broadly flat compared to last year, the size of companies attracting them has increased sharply. 

A total of five FTSE 100 firms have agreed to take-private deals including Schroders, Intertek and Beazley in 2026. Foreign buyers are picking up Britain’s biggest companies on the cheap – and while there are fees on offer for advisors, bankers are fretting over the consequences

“If you put your mum’s wedding ring on Ebay, you start to look a bit desperate,” the banker said.

Foreign buyers paying a premium

Analysts point to years of outflows from UK equity funds and sluggish valuations as the primary cause of the exodus from the market.

Of 29 bids announced so far this year, the offer price has come in at an average premium of 36 per cent, according to Peel Hunt. Some of the biggest deals of the year have come in well above that – Intertek and Beazley were picked off at a roughly 60 per cent premium.

“Deals happen. That’s capitalism. But why do overseas buyers consistently value great British growing companies so much more highly than domestic investors?,” asked James Ashton, chief of the Quoted Companies Alliance after the announcement of the Ramsdens deal earlier this week.

There are tentative signs the tide may be turning – UK equity funds saw their first net inflows since November 2024 in May, according to data from Calastone – but City figures say the trend will continue if domestic British investors do not begin to back homegrown firms.

Speaking to CityAM this week, Andy Haldane, an adviser to Andy Burnham and chair of the British Chamber of Commerce, lamented the trend of firms being “plucked off by overseas foreign raiders” and suggested ministers should use the tax system to push British investors towards domestic investment. 

A “tilting of the playing field” in the tax system, may help nudge domestic investors towards a domestic bias, he said, adding there was a “million and one ways in which you can go about that”. The government has already been forced to row back on a mandate power that would allow ministers to force pension funds to back British companies.

‘Going to get worse before it gets worse than that’

Bankers are hoping that a crop of new listings may help replenish the market and shift the mood around London after the summer.

A number of deals including Waterstones, fintech firm SumUp and Indian payments company Airtel Money may look to debut in the post-summer window, City sources say.

But a revival in Initial public offerings (IPOs) has so far been curtailed by volatility brought on by the war in Iran and the threat posed by AI to tech and software firms.

Visma, the Hg-owned software company, had been expected to list in London in the first quarter at a valuation of around $20bn but the deal has been postponed until next year at the earliest due to the global rout in software stocks, sources told CityAM. 

Travel firm Love Holidays also paused its IPO plans due to the turmoil triggered by the war in Iran, sources said, though it may revive the plans later in the year.

For now, the takeover spree is expected to gather pace. Patrick Sarch, head of Public M&A at law firm White & Case, said the impending change of Prime Minister may spur companies to move now before markets are shaken by a raft of new policies.

“Things are going to get worse before they get even worse than that,” he said. “That’s a reason to get your deal done sooner rather than later.”

Gareth McCartney, global Head of capital markets origination at UBS, said the deals offensive underscored the quality of UK firms and “should be seen as a vote of confidence in the long term UK macro outlook”.

But for the banker who attended the City gathering last week, only one thing was clear about London’s recent deals spree: “There’s a sh*tload more to come.”