Takeover boom: more UK companies gobbled up by wealthy suitors

Cheap UK assets remain very much on the radar of foreign bidders and cash-rich American private equity firms. City writer Graeme Evans rounds up the latest action.

3rd July 2025 08:28

Graeme Evans from interactive investor

The mid-cap takeover battleground saw yet more action on Wednesday as one of the world’s leading dealmakers tabled a Spectris (LSE:SXS) bid almost double June’s stock market valuation.

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KKR trumped its private equity rival Advent by offering a total of £4.1 billion, valuing the shares of the precision measurement firm at 3,972p plus a 28p a share dividend.

Spectris last traded above 4,000p in September 2021, having dipped below 2,000p in April and 2,038p the day before the FTSE 250-listed company entered a takeover situation on 6 June.

A long-time admirer, KKR said there were a number of opportunities for Spectris to accelerate growth in attractive end markets that it has not been able to execute as a listed company.

KKR is also interested in buying healthcare properties firm Assura (LSE:AGR), although to do so it will have to overturn a £1.8 billion cash and shares takeover proposal by Primary Health Properties (LSE:PHP).

KKR’s bids form a wave of demand approaching the shores of UK plc, Peel Hunt said today.

It reported that US private equity accounted for 14% of all takeover situations in the first half of this year. This rose to 27% when US strategic bidders are included.

Michael Nicholson, the investment bank’s head of advisory and M&A, said: “There is a ring of truth to the suggestion that the constituency that ascribes the lowest valuation to UK equities are UK plc investors themselves.”

The focus of bidder interest has been firmly on the mid-cap segment, with 97% of all firm offers so far this year at a value of less than £2 billion.

At the current run rate, 2025 will be the most intense period of UK takeovers of recent years after averaging two new bid situations per week.

Other targets so far this year have included the industrial chains business Renold (LSE:RNO), Urban Logistics and Empiric Student Property (LSE:ESP).

Notwithstanding the modest average transaction size, Peel Hunt said £74 billion of firm offers in the first half would annualise to the highest aggregate value of listed takeovers since 2021.

The real estate sector has emerged as a focal point in M&A activity after accounting for 20% of all target companies, compared to a five-year average of 11%.

This has been underpinned by the sustained discounts to net asset value at which many of the mid-sized, externally managed real estate investment trusts (REITs) trade.

The sector has also been the one where US private equity appears to have met its match in the form of UK-listed consolidators.

As well as the bid for Assura by Primary Health Properties, the board of Warehouse REIT Ord (LSE:WHR) switched its recommendation from a cash bid from private equity firm Blackstone to a cash and shares offer by Tritax Big Box Ord (LSE:BBOX).

Peel Hunt said the benefits of greater scale and more liquidity, while preserving key assets and high-quality businesses in UK markets, have become increasingly persuasive factors for UK plc boards and investors when weighing up offers against all-cash proposals.

Rosebank Industries’ acquisition of ECI in the US, supported by a £1 billion equity raise, has been another example of the return of the UK consolidator.

Nicholson added: “In some UK boardrooms, there are evidently signs of shifting sentiment from a sense of vulnerability to a more front-footed, strategic outlook."

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