Three more London-listed companies are set to be taken over as the value of deals removing firms from the capital’s under-pressure stock market so far this year passes $100bn (£74bn).
On Tuesday, Bodycote, the FTSE 250 industrials group that has been listed on the London Stock Exchange since 1972, agreed a £1.84bn takeover by the US private equity group Veritas.
The Macclesfield-based company, which offers services including heat treatment for manufacturing, metal joining and protective metallic coatings, had been the subject of a bidding war involving the rival European buyout group CVC.
Shares in Bodycote soared 4.5%, making it the second biggest riser in the FTSE 250, after CVC indicated that it might make a counteroffer.
“CVC is considering its position and a further announcement will be made when appropriate,” the company said. “Bodycote shareholders are strongly advised to take no action in response to the Veritas offer in the meantime.”
Veritas said Bodycote’s prospects would be better served by being taken out of public markets.
“As a private company under Veritas’s ownership, Bodycote will benefit from enhanced flexibility and long-term perspective to support continued investment in the business and pursue targeted organic and inorganic growth opportunities,” the US group said.
Meanwhile, the telecoms company Gamma Communications recommended a £1.1bn offer from the UK private equity company Epiris, days after confirming it was in possible takeover talks with the European buyout company Waterland.
Epiris first indicated its interest in a potential takeover in June. On Tuesday it said: “The additional flexibility that comes from a private company environment will enable Gamma to invest further and focus on sustainably improving the growth of its business over the long term.”
Separately, the Scottish energy company Capricorn is set to end its 38 years on the FTSE all-share index after striking a deal with its Norwegian rival DNO for $396m. Capricorn had recommended an offer from Genel Energy, but the company switched its recommendation after receiving a higher offer from DNO.
The takeovers put further pressure on the LSE, which has been hit by an exodus of companies this year in deals totalling almost $110bn, according to data compiled by Bloomberg.
after newsletter promotion
“Overseas acquirers continue to feast on the UK market like hungry customers at an all-you-can-eat buffet,” said Russ Mould, the investment director at AJ Bell.
“While some investors may be toasting the payoff they receive from the wave of mergers and acquisitions, the longer-term implications are potentially bleak. These deals mean a further dilution of the breadth and quality of a UK market which is struggling to attract new companies to replace the ones which are being acquired.”
The flurry of dealmaking includes easyJet’s £5.7bn takeover by the US private equity company Apollo, the warehouse landlord Segro’s £14bn takeover by its US rival Prologis, and the sale of ITV’s broadcasting and streaming business to Sky’s owner, Comcast, for £1.6bn.
Earlier this year the historic British asset management group Schroders agreed a £9.9bn takeover by a US investor.
Other deals include the £10bn takeover of the lab testing group Intertek by a consortium led by the Swedish private equity company EQT in June. Beazley, the specialist insurer with clients including Lloyds of London, agreed an £8bn deal to be acquired by its larger rival Zurich in February.
