The Daily Telegraph - Saturday - Money
Three bargain British stocks in line for a foreign takeover bid
Greene King has been bought by Hong Kong’s richest man, but the FTSE 250 brewer will not be the last British firm to fall prey to international rivals.
A weaker currency has made British stocks significantly cheaper for foreign companies to buy. The pound has fallen by 5pc against the dollar in 2019, mostly in the past month, and the weaker currency was cited as a key factor in the purchase of Greene King by CK Asset Holdings, part of 91-year-old billionaire Li Ka-shing’s investment vehicle CK Hutchison.
Owning shares in a company that gets acquired can be highly lucrative. To convince shareholders to approve the bid, the purchaser often offers far more than the prevailing market price.
Here Telegraph Money looks at three London-listed businesses that could be bought by overseas investors.
The tobacco company has been under increasing pressure as smoking falls out of favour, raising doubts over the growth potential of the sector and of the stock itself.
The share price has halved since its peak in August 2016. This fall, combined with a weak pound, could make it susceptible to a takeover by an overseas rival.
Adrian Lowcock of Willis Owen, a broker, said that even if a takeover was not imminent the stock could still be worth buying, particularly for income investors. The company generates substantial amounts of cash, which it uses to fund its dividend. The current yield is 9.2pc. The broadcaster’s share price has halved in the past five years and is 62pc below its July 2015 peak, thanks to its struggle to earn advertising revenue. But Ian Forrest of The Share Centre, another broker, said the newly-announced winter series of Love Island should help keep audience numbers high.
Most investors are running away from the British high street, but Laith Khalaf of Hargreaves Lansdown, a third broker, said Intu could attract interest as a takeover target. It owns a number of shopping centres, such as Manchester’s Trafford Centre and Lakeside in Essex. The share price has fallen by 90pc over five years, which could tempt buyers.