Roll up, roll up, everything must go. UK PLC is up for sale. With the number of recent UK takeovers, you could be forgiven for thinking that the UK has become the focus of bargain hunting for overseas buyers. With the Brexit-inspired collapse in sterling, international investors and cash rich private equity houses are buying up UK plc.
Over the summer we have seen Greene King succumb to a £2.7 billion bid from Li Ka-Shing, following on from a spate of takeovers including Saputo (Canada) acquiring Dairy Crest and Lego/Blackstone taking out Merlin Entertainments. Cobham is now under attack from a US based PE house and every week there seems to be M&A action in the PLC arena.
Since the referendum, the pound has fallen 18% against the dollar and the public markets are now a huge opportunity for cash rich buyers, particularly private equity houses who have to do deals to make money.
It is interesting that the main activity is in the public markets rather than the unquoted sector, which remains subdued pending some direction from Parliament. The Bishopsgate team have a number of deals closing prior to Xmas, but they also have a number of mandates “on hold” pending some clarity. The Bishop expects deal activity to return to normal in Q1 2020 but we all have one eye on Westminster.