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The UK is expected to experience a surge in mergers and acquisitions (M&A) in the second half of the year due to the country's cheap equity market. British companies, including Deliveroo, Currys, and Dowlais Group, are among the most likely M&A targets. The increase in UK deals is driven by low valuations, with the UK stock market trading at a 42% discount to the MSCI World. Political stability under the new Labour government is also expected to support the M&A activity. Foreign bidders have been active in the UK, with recent deals including Carlsberg's acquisition of Britvic and the purchase of various companies by Royal Mail owner International Distribution Services, cybersecurity firm Darktrace, packaging giant DS Smith, and logistics business Wincanton. The recent Labour election victory has brought optimism to the M&A sector, and investors anticipate renewable energy firms to attract buyers under the new government. However, there may be a pause in cross-border deals until the US election in November, and bidders may face pressure to offer more money for high-quality UK companies. [Extracted from the article]

Private equity firms are acquiring potential initial public offering (IPO) candidates in Europe, leading to a decrease in the IPO pipeline. Companies such as Flix SE and Sunrise Medical had their listing plans canceled after being bought out by investment firms. Private equity offers are seen as a welcome alternative for firms struggling to raise funds through IPOs. The gap between public and private investors is still significant, with portfolio managers hesitant to pay high prices for new stocks. However, as the IPO market improves, the pendulum may swing back in favor of listings. [Extracted from the article]

Foreign appetite for UK firms is on the rise, with the value of proposed, pending, or completed takeovers reaching £32.7 billion ($41.4 billion) so far this year, a 143% increase from 2023. London-listed stocks are particularly attractive due to their lower valuations compared to international peers, likely influenced by the cost-of-living crisis and the aftermath of Brexit. The UK's FTSE 100 index is 12% cheaper than the Euro Stoxx 50 benchmark and 45% cheaper than the US S&P 500. Analysts predict that foreign acquisitions of UK companies will continue until the valuation gap closes or shareholders resist opportunistic takeover offers. [Extracted from the article]

Kestrel Partners LLP, an investment firm specializing in small-cap software companies, is set to profit from two UK take-private deals. The firm owns significant stakes in IQGeo Group Plc and Gresham Technologies Plc, both of which have received offers from US private equity firms. Kestrel's strategy is to build minority equity stakes in listed software businesses with a market value of less than £200 million. The firm expects more interest in UK assets and believes the London market is currently favorable for mergers and acquisitions. The Kestrel Opportunities Fund has had a strong performance, with a 12-month annualized return of about 27%. [Extracted from the article]

A surge in mergers and acquisitions among UK homebuilders is expected before the upcoming general election, potentially making this year the busiest for deals in over a decade. Bellway's rejected bid for Crest Nicholson is the latest in a series of potential big deals in the sector, including Barratt's acquisition of Redrow and Persimmon's reported interest in Cala Group. The housing market slowdown and the Labour party's plans to build 1.5 million homes have created an opportune time for consolidation. The mergers could provide a much-needed boost to housing shares, which have underperformed in recent years. [Extracted from the article]

Investment bank Panmure Liberum is expected to cut over two dozen jobs following a merger earlier this year. The cuts are anticipated to be announced this week. The merger between Panmure Gordon and Liberum was an all-stock deal that aimed to address the challenges faced by corporate brokers in the City of London. The merger brought together Panmure Gordon, an established firm founded in 1876, with Liberum, a relative upstart. [Extracted from the article]

Hargreaves Lansdown, the largest platform for retail investors in the UK, has rejected a £4.7 billion takeover offer from a group of investors, stating that it undervalues the company. The offer represented a 30% premium at the time, but Hargreaves Lansdown's stock price soared following the rejection. Analysts suggest that this potential deal could have positive implications for other wealth management firms in the UK, such as Quilter, AJ Bell, and St James's Place, as the industry seeks scale and cost savings through mergers and acquisitions. The UK market is currently undervalued compared to other major markets, and UK investment managers are seen as attractive takeover targets due to their low valuations. [Extracted from the article]

Banco Bilbao Vizcaya Argentaria (BBVA) may be able to increase its hostile takeover bid for Banco de Sabadell by selling Sabadell's UK unit, TSB Banking Group. According to analysts at Barclays, divesting TSB could allow BBVA to include a cash element of up to 10% of the offer without significantly impacting BBVA's shareholders. BBVA's CEO, Onur Genc, has not yet confirmed whether TSB would be sold after a potential Sabadell takeover. BBVA previously attempted to acquire Sabadell in 2020, but the talks fell through. [Extracted from the article]

According to a survey conducted by Bloomberg, a takeover of Anglo American Plc would need to be priced at more than £30 per share, which is higher than the offer made by BHP Group Ltd. Traders and analysts believe that Anglo American shares are currently trading above the value of BHP's proposal, indicating that a higher bid is expected. The average acceptable price for a potential deal, as determined by the survey participants, was £30.43 per share. Analysts at Deutsche Bank suggest that there are two possible scenarios: either Anglo American is acquired at an improved price or the company fulfills some of the divestments proposed by BHP. However, there is no certainty that an offer will be made, and BHP has until May 22 to announce its intentions. [Extracted from the article]

Traders are driving up the share price of Anglo American Plc, indicating their expectation of a higher bid from BHP Group Ltd. or another potential buyer. BHP's current proposal values Anglo at £31.1 billion ($38.9 billion) and includes a spin-off of two listed Anglo units. However, the current share price of Anglo American is 4% higher than the implied bid price, suggesting that traders anticipate a higher offer. Analysts and risk-arbitrage traders predict that other mining companies, such as Rio Tinto Plc and Glencore Plc, may also be interested in acquiring Anglo due to its significant copper production, which is in high demand for the energy transition. [Extracted from the article]

Traders are driving up the share price of Anglo American Plc, indicating that they anticipate a higher bid from the suitor or another interested party. BHP Group Ltd. has proposed a takeover of Anglo American, valuing the company at £31.1 billion ($38.9 billion). However, the current share price of Anglo American is above the implied bid price, suggesting that traders expect a higher offer. Analysts and risk-arbitrage traders predict that other mining companies, such as Rio Tinto Plc and Glencore Plc, may step in or that BHP will increase its offer. The demand for copper, a key metal for the energy transition, is driving interest in Anglo American's assets. [Extracted from the article]

According to an informal survey conducted by Bloomberg News, UK firms are expected to be popular targets for mergers and acquisitions (M&A) this year due to their low valuations. British stocks accounted for 70% of companies mentioned in the survey, with Allfunds Group Plc receiving the most votes. The FTSE 350 Index's significant discount compared to the MSCI World Index has attracted bargain hunters. Smaller UK companies, in particular, have seen increased attention from cash-rich private equity firms and corporate acquirers. There have already been several notable takeover offers this year, and investors are keeping an eye on Allfunds, which has drawn interest from investment firm Motive Partners. Overall, there is optimism that M&A activity in Europe will rebound this year. [Extracted from the article]

According to London stockbroker Peel Hunt Ltd, the UK small-cap stock index is at risk of disappearing by 2028 if the current level of takeover activity continues and the initial public offering market does not recover. The number of companies listed on the FTSE Small Cap Index has decreased from 160 in 2018 to 114 at the end of 2023. The combined market capitalization of firms on the small-cap index has also declined significantly. This decline is due to takeovers and a lack of new additions to the market. Peel Hunt suggests implementing measures to improve fund flows into the UK market, including addressing stamp duty. [Extracted from the article]

According to Bank of America, profitability remains a crucial factor for tech startups looking to go public in Europe. Despite a recent increase in European IPOs, tech companies have struggled to raise funds on European exchanges for the past two years. In contrast, the US has seen successful IPOs from loss-making companies like Reddit Inc. and Astera Labs Inc. The European IPO market is expected to reopen once there are more interest rate decreases and sustained primary market activity globally. [Extracted from the article]

Keysight Technologies has made a bid to acquire Spirent Communications, a struggling UK telecom network testing company. Keysight's offer of 201.5 pence per share, including a special dividend, values Spirent's equity at £1.16 billion, surpassing the earlier bid from Viavi Solutions. Spirent, which provides automated testing for networks used by companies in 5G, cloud, and autonomous vehicle services, has faced challenges due to increasing costs and reduced spending by telecom customers. The deal is subject to approval from investors and regulators. The UK has seen increased takeover offers from foreign suitors due to low valuations and attractive M&A measures. [Extracted from the article]

Europe's initial public offerings (IPOs) are off to a strong start in 2024, with $5.7 billion raised through first-time share sales up to March 27. This puts Europe on track for its largest quarterly volume in 18 months. Skincare company Galderma Group AG's $2.6 billion offering accounted for almost half of the first-quarter total, with other companies such as Douglas AG, Athens International Airport SA, and RENK Group AG also contributing. While the number of IPOs in Europe is still low compared to previous years, more listings are expected after the Easter holiday. The success of Galderma's IPO may encourage other companies to go public, although some IPOs have not performed as well. Overall, European IPO activity is experiencing a resurgence due to good companies, increased investor confidence, and improved performance in funds. [Extracted from the article]

UK companies are proving to be tough targets for bargain hunters looking for takeover opportunities. Even companies that have seen their share prices decline are rejecting generous offers, demanding higher premiums. Despite this, M&A premiums for UK companies are at their highest level since 2018. The UK's low valuations and attractive M&A valuation measures have made it a hotbed for deals. However, some analysts caution that walking away from a suitor based solely on valuation can be risky, as demonstrated by the example of THG Plc. [Extracted from the article]

The biotech industry has experienced a surge in dealmaking, with 46 transactions worth over $100 billion announced last year. This increase in activity has led to a rally in biotech stocks, with the Russell 2000 Index Biotechnology Subsector rising nearly 60% since October. Many pharmaceutical companies are seeking deals to revitalize their drug pipelines, as patent expiries pose a challenge. The top 20 pharmaceutical firms have significant cash reserves, providing them with the means to pursue mergers and acquisitions. Immunology, obesity, and cancer have been popular areas for M&A, and fatty liver disease could be the next focus. Experimental treatments have attracted the most attention, with companies like Novartis, Sanofi, and Johnson & Johnson making significant acquisitions. Overall, the industry is experiencing continued innovation and strong stock performance. [Extracted from the article]

Belluscura Plc, a medical-device company listed on the London Stock Exchange, issued $7 million of stock to acquire $6 million in cash from TMT Acquisition Plc, a blank-check company. Blank-check companies are typically created to acquire existing businesses, not to be acquired themselves. However, TMT Acquisition found a way to use its cash balance to finance Belluscura in exchange for an equity stake, rather than returning the money to investors. This deal allows Belluscura to access the funds needed for its development and increases its ability to execute its sales pipeline and strategy. [Extracted from the article]

According to a report by Morgan Stanley, global mergers and acquisitions (M&A) are expected to increase by 50% this year due to recovering corporate confidence and sustained economic growth. The report highlights health care, real estate, and technology as the most attractive sectors for M&A. Potential acquisition candidates include companies such as Acadia Pharmaceuticals Inc., Lumentum Holdings Inc., ITV Plc, Aston Martin Lagonda Global Holdings Plc, Basic-Fit NV, and Eutelsat Communications. The headwinds that previously hindered deal-making have eased, with global equity markets rallying, high-yield bond issuance increasing, and corporate cash levels remaining high. However, recession risk and regulation are still seen as significant obstacles to M&A activity. [Extracted from the article]

The UK has seen a surge in mergers and acquisitions as foreign buyers take advantage of the country's underperforming stock market. Direct Line Insurance Group and Currys both rejected bids from overseas buyers, while Wincanton received an offer from a US logistics provider, sparking a bidding war with its French suitor. The lower valuations of UK assets and the weak pound make UK firms attractive to foreign buyers. However, most of the interest is focused on smaller companies, as deal activity among FTSE 100 firms remains slow due to borrowing costs and economic concerns. [Extracted from the article]

Shein, a popular fast fashion brand founded in China, is considering a multi-billion dollar initial public offering (IPO) in London, which could potentially be the largest IPO in the city's history. However, the company is also applying to list in New York, but faces political and regulatory challenges in the US, including accusations of using cotton from forced labor in the Xinjiang region. The UK Chancellor of the Exchequer has held talks with Shein's executive chairman about a London listing, but the plans may face opposition in the UK as well. The potential listing of Shein in London could provide a boost to the city's market, but concerns about the company's supply chain and the ethics of fast fashion may attract scrutiny. The UK government is considering measures to attract more companies to list in London, but there are concerns about diluting listing rules too much. [Extracted from the article]

Shein, a popular fast fashion brand founded in China, is considering a multi-billion dollar initial public offering (IPO) in London, which could potentially be the largest IPO in the city's history. However, there are concerns about whether the plan will come to fruition due to political and regulatory hurdles in the US, where Shein is applying to list. The company has faced scrutiny from Chinese authorities and accusations of using cotton from forced labor in the Xinjiang region. While a London listing could provide a boost to the city's market, some analysts are skeptical and believe Shein may choose Hong Kong or New York instead. The UK government is exploring measures to attract more companies to list in London, including the introduction of a tax-free savings account for investing in British stocks. [Extracted from the article]

Currys Plc, a London-based electronics retailer, has attracted takeover interest, leading to speculation about potential targets in the European retail sector. Shares of Currys surged 38% on Monday due to the possibility of a bidding war between Elliott Investment Management LP and JD.com Inc. Other companies in the industry, such as AO World Plc, Ceconomy AG, and Fnac Darty SA, also experienced stock price increases. Despite the improvement in macro conditions, these retailers are currently trading at significant discounts compared to their valuations during the COVID-19 lockdowns. Analysts and traders suggest that a takeout price for Currys would need to be raised to around 75 pence per share, well above Elliott's preliminary offer of 62 pence. Other British retail firms, including Hotel Chocolat Group Plc, ASOS Plc, Ocado Group Plc, and Halfords Group Plc, have also been the subject of takeover speculation. In November, it was reported that JD.com was exploring the possibility of acquiring a stake in Ceconomy AG, a German consumer electronics firm. [Extracted from the article]