Key facts
- Top shareholders are resisting low-ball takeover offers for London-listed companies.
- The total value of live or completed bids is expected to reach £69.3bn by the end of 2026.
- Segro and Intertek rejected multiple initial bids before accepting higher offers.
- DCC Energy agreed to a £5.7bn takeover despite opposition from its founder and some institutional shareholders.
Top shareholders of London-listed companies are increasingly pushing back against takeover bids perceived as too low, a trend driven by the UK's persistent low valuations compared to global competitors. This year has seen a wave of bids, with foreign buyers targeting firms like Schroders, Intertek, and Beazley. Retail investment firm AJ Bell anticipates the total value of live or completed bids to reach £69.3bn by the end of 2026.
Analysts attribute this surge in takeovers to the UK's depressed market valuations, which allow well-funded private buyers to present themselves as the sole option for struggling businesses. Since 2023, there have been 154 bids for UK companies valued over £100m, erasing approximately £165bn in market capitalization. The average acquisition premium paid by buyers relative to companies' share prices has reached 45% this year.
Investors are becoming more vocal and willing to reject initial offers, emboldened by past successes where companies negotiated higher prices. FTSE 100 investor Segro, for example, rejected three "opportunistic" bids from US rival Prologis before accepting a £14bn offer. Similarly, Intertek declined three undervalued bids from Swedish private equity firm EQT before agreeing to a £10.6bn deal, influenced partly by activist investor Palliser Capital.
However, not all companies heed shareholder concerns. DCC Energy agreed to a controversial £5.7bn takeover by UK private equity groups KKR and Energy Capital Partners, a decision recommended by its board despite opposition from its founder, Jim Flavin, and pension companies like Aviva and Fidelity, who deemed it a "bad outcome" for clients.
Despite these instances, experts believe the increased shareholder activism and public discourse will not significantly reduce takeover activity. Deals are still expected to proceed as opportunities remain, with public scrutiny and bidding contests becoming an integrated part of the M&A process rather than a deterrent.