Three more London-listed companies have accepted bids from foreign buyers, leading a group of top advisers to warn that the London Stock Exchange risks losing more blue-chip firms without urgent action from ministers and officials. The cohort stated that "complacency is not a viable option" following the news.
FTSE 250 firms Bodycote and Gamma Communications, along with energy company Capricorn, are the latest to agree to leave London's bourse this year. These three deals have a combined takeover value exceeding £3bn.
Macclesfield-based Bodycote, a member of the London Stock Exchange since 1972, has agreed to be acquired by US private equity firm Veritas Capital in a deal valuing the company at £1.9bn. The offer of 932p per share represents a premium of 41.4 per cent.
Telecoms giant Gamma recommended a £1.1bn offer from UK private equity firm Epiris. Edinburgh-headquartered oil and gas firm Capricorn Energy switched a recommended offer from Genel Energy to Norwegian petrochemicals giant DNO, ending its 38-year presence on the London Stock Exchange.
Chris Beauchamp, chief market analyst at IG, commented that "Any hope that the steady leak of FTSE companies to overseas buyers has stopped will have been dashed by [yesterday] morning’s trio of announcements." He added that the news is "another blow to the efforts of the London Stock Exchange, the City of London and the government to maintain the importance of London’s financial markets."
Leading City figures are urging politicians to introduce new policies to boost Britain's public market. Steven Fine, chief executive of Peel Hunt, described it as "a shame – almost a tragedy" that more of Britain’s pension capital is not ring-fenced for the domestic market. Mark Kelly, chief executive of MKI Global Partners, warned of "likely to be a lot more big public M&A coming in the UK before the end of the year" but noted there were no easy policy fixes.
Charles Hall, head of research at Peel Hunt, told City AM, "We urgently need to reverse the consistent and sizeable outflows of capital to ensure that we retain a healthy market for existing listed companies and ensure a vibrant market for new listings." He added, "There is increasing competition for companies, capital and talent and we need to play to win. Complacency is not a viable option."