Investors slam ‘absurdity’ of cheap UK stock market

As foreign predators swoop on ANOTHER London-listed company . . .

LEADING investors slammed the ‘absurdity of UK stock market valuations’ as foreign predators snapped up yet another British company.

In the latest swoop on UK plc by overseas suitors, Us technology group Viavi solutions has agreed to pay 175 p per share to buy Crawley-based telecoms firm spirent.

This values the FTsE 250 company – which tests, measures and analyses telecoms devices – at £1 bn and is roughly a 61 pc premium to its closing price on Monday.

The proposed deal adds to the growing list of British businesses who have been targeted by foreign buyers in recent months.

This includes Wincanton, Currys, All3Media and Direct Line.

Interest in UK plc has spiked since Covid as bidders looked to take advantage of bargain price tags and the weak pound in a wave of ‘pandemic plundering’.

This pattern has lingered into the post-Covid world as opportunistic investors flock towards London’s knock-down prices.

This has fuelled concerns that British companies are being snapped up on the cheap.

Fund managers at JO Hambro Capital Management, a top ten investor in Currys, have attacked the lowball approaches being made by international predators.

Clive Beagles and James Lowen, senior managers at the fund, said the interest in Currys ‘clearly shows the absurdity of UK stockmarket valuations’.

Richard Bernstein, boss of activist investor Crystal Amber, also raised alarm bells over the current City landscape.

‘Another day and another FTsE 250 company is being bought by a Us predator,’ he said. ‘ several more bids are surely in the works. It’s like a holding bay at an airport runway as planes queue ahead of takeoff. Us trade buyers understand that they’re acquiring bargains.’

There are signs that British boards are taking a stand against foreign predators.

Last week insurer Direct Line revealed it has rejected a ‘highly opportunistic offer’ worth £3.1 bn from Belgian firm Ageas.

And in a sign more bids are being turned down, the number of failed takeovers of Londonlisted companies has more than doubled in recent years.

Data from the London stock Exchange shows the proportion of takeover offers for UKlisted companies that were withdrawn rose to 17 pc between 2021 and 2023 from 8 pc between 2014 and 2020.

But despite these failed deals, spirent’s board yesterday said it will back a takeover by Viavi.

Neil Wilson, the chief markets analyst at Finalto, said: ‘Another tech firm bites the dust.’