Top shareholders of London-listed firms are increasingly vocal in challenging takeover bids this year. Concerns have been raised that buyers are capitalising on low valuations to acquire companies at reduced prices.
Foreign buyers have targeted various London Stock Exchange companies, including FTSE 100 firms such as 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 wave of takeovers to the UK's persistent low valuations compared to global competitors. However, some shareholders are concerned that firms are exploiting this valuation gap by submitting 'low-ball' offers.
Henrik Persson, head of public M&A at Cavendish, noted that investors are becoming more willing to voice their opinions in takeover situations, partly to influence outcomes and demonstrate active ownership. He added that recent situations have emboldened shareholders, showing that rejecting initial bids can lead to improved offers.
Data from AJ Bell indicates that the average price paid by acquirers relative to companies’ share prices has reached 45% this year. Since 2023, 154 bids for UK companies with a market value over £100m have erased approximately £165bn of market capitalisation.
FTSE 100 investor Segro, for example, rejected three takeover bids from US rival Prologis before accepting a £14bn offer, with shareholders credited for influencing this decision. Similarly, testing company Intertek declined three bids from Swedish private equity firm EQT, arguing they undervalued the group, before accepting a £10.6bn offer.
Despite this trend, not all firms have listened to shareholder concerns. DCC Energy agreed to a £5.7bn takeover by UK private equity groups KKR and Energy Capital Partners in late July, despite opposition from its founder and largest institutional shareholders.
Persson believes that while public scrutiny and shareholder activism are increasingly part of the process, they are unlikely to reduce overall takeover activity, as opportunities for deals persist.