Bosses fear foreign raiders as stock market stagnates

BRITAIN’S beleaguered stock market has left City bosses increasingly nervous about the threat of foreign takeovers, according to new research.

The majority of FTSE 350 board members surveyed by investment broker Deutsche Numis said their companies are at a greater risk of being acquired by buyers overseas in 2024.

International buyers took advantage of cheap British stocks last year, resulting in a surge in takeover premiums.

Higher premiums fuelled fears that British companies were undervalued, prompting businesses to seek greater valuations abroad, including on the New York Stock Exchange.

The report said that British stocks are currently trading at their largest discount since January 2022. Oliver Ives,

‘UK takeover regime is a well-trodden path for international corporates, especially from the US’

co-head of M&A at Deutsche Numis, said: “The UK takeover regime is a well-trodden path for international corporates, especially those from the US, who are often able to benefit from one or more of favourable exchange rates, valuation arbitrage and scale.”

While economic upheaval dampened M&A demand last year, improved market conditions have boosted confidence and could lead to more international buyers seeking undervalued companies overseas, according to Stuart Ord, co-head of M&A at Deutsche Numis.

He said: “Despite protracted macroeconomic uncertainties and increased geopolitical concerns of 2023, there was a promising increase in UK deal activity in the last few months of the year as confidence grew in the outlooks for inflation and interest rates.”

Such confidence has also led to Uk-listed companies becoming more willing to broaden their search for takeover targets across Europe, the Middle East and Africa, the report said.