These UK companies are attractive takeover targets
If evidence were needed that British businesses are undervalued, just look at how many are attracting bids right now. City writer Graeme Evans runs through the latest victims.
11th June 2025 14:58
by Graeme Evans from interactive investor
Dealmakers continue to place a much higher value on UK companies than investors after stock market stalwart Ricardo (LSE:RCDO) joined the list of firms being taken over at a significant premium.
The environmental and engineering consultancy, which listed in 1962, has backed a £281 million approach by Canada’s WSP at a level 69% higher than its volume-weighted share price of the previous 90 days.
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FTSE 250-listed healthcare landlord Assura (LSE:AGR) is also heading for the exit after recommending private equity giant KKR’s new proposal worth 38% more than its three-month average price.
On Monday, Spectris (LSE:SXS) said it was minded to accept a £3.7 billion takeover approach pitched by private equity firm Advent 82% higher at 3,735p. The specialist provider of handheld instruments used in materials analysis last traded at this level in February 2024.
An even bigger premium was confirmed on the same day by Qualcomm when it sealed a deal to buy the 2021 IPO stock Alphawave IP Group Ordinary Shares (LSE:AWE) for about £1.8 billion. The cash offer of 183p was 96% higher than the undisturbed price, or 59% above the six-month weighted average.
Peel Hunt said Spectris and Alphawave took this year’s number of bids for UK companies with a market capitalisation of more than £100 million to 30 at a combined price tag of £25 billion. This follows 45 bids in 2024 with a total value of £52 billion.
The average premium of this year’s crop is 43%, which the City firm said showed the current scale of undervaluation in the UK.
It added: “Companies in the UK seem to be far more attractive to acquirers than investors. The root cause is the consistent outflow of capital from domestic markets.
“If we want the UK equity market to thrive, an urgent rethink is required to ensure that UK capital backs UK companies.”
Of the 30 transactions announced year-to-date, 11 are in the FTSE 250, five in the FTSE Smallcap and 10 on the AIM junior market. There’s yet to be an offer for a FTSE 100 company in 2025.
The takeover targets are not being replaced, with only one IPO of more than £100 million market capitalisation so far this year. Last week, Glencore-backed Cobalt Holdings pulled a flotation after opting to raise funds privately.
Peel Hunt said: “The scale of M&A and lack of IPOs is resulting in a material reduction in the number of UK-listed growth companies.
“It is essential that action is taken to ensure the health of the ecosystem and enable companies to grow, scale and stay in the UK. We believe this can be done through reform of pension funds, ISAs and stamp duty.”
Two companies bucked the takeover trend today when they hailed their standalone prospects following a period of bid interest.
AIM-listed healthcare technology business Craneware (LSE:CRW) said it rejected a proposal from Bain Capital at 2,650p a share. This is more than 30% higher than the prevailing price but a level it said “fundamentally” undervalued the company and its prospects.
It pointed out that its share price performance over the last 12 months had been impacted by non-Craneware specific market factors.
The company backed up the rejection by confirming that trading in the year to June has been strong, with continued growth in revenues and underlying earnings.
Shore Capital is supportive of the decision, having previously published a 2,600p fair value estimate based on conservative medium-term assumptions.
The broker said: “We nudge up our estimates (again) and continue to see ample scope for further earnings momentum. We see significant share price upside on a standalone basis, but the approach also highlights that others are waiting in the wings.”
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GlobalData (LSE:DATA) also announced that it’s no longer in the takeover spotlight after discussions with Intermediate Capital Group came to an end.
The data analytics company, whose £1.4 billion valuation at last night’s closing bell made it the fifth-largest stock on AIM, said it “remains highly confident” in future prospects.
It has just completed the first part of a three-year growth transformation plan, which has seen the company invest in its AI capabilities to boost client insight. Subscriptions make up about 80% of revenues.
The group was formed in 2016 following the consolidation of several data and analytics providers. Its chief executive and majority shareholder is Mike Danson, who founded the online information company Datamonitor in 1990.
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