In the crosshairs of private equity

3 January 2024

What readers said about this report

"Thanks to lower interest rates combined with historically low UK stock market valuations, the time could be ripe for a rush of private equity money to bid for UK companies", one media outlet reported recently.

Indeed, Britain remains one of the world's most attractive markets for takeover bids:

• Record-low valuations.
• Few restrictions on foreign capital.
• The world's sixth-largest economy.

Due to the low valuation of the overall market, bid premia in Britain have been way higher than what you'd usually find elsewhere – often 40%, 50%, or even more.

The company featured in today's report is another prime takeover target:

• Consensus among major shareholders to sell the company.
• Almost debt-free balance sheet.
• Strong market share and brand.
• Lots of recurring revenue.

Relative to other transactions in the same sector, a bid will likely have to be at least 50-75% above the current share price.

This stock has a market cap of just USD 178m.

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