Wood Group yesterday became the latest London-listed firm to reject a foreign takeover bid in another sign that the City is fighting back.
It comes after Hargreaves Lansdown and Anglo American also rebuffed multi-billion-pound approaches this week while BT thumbed its nose at short-sellers betting against it.
Simon French, chief economist at Panmure Gordon, said there had been a ‘definite change of tone’.
UK fund flows have also started to climb. Some £120million was pumped into active UK funds last month, according to Liberum, whose analyst, Joachim Klement, said this showed ‘tentative signs’ of recovery – after a prolonged exodus of investors.
That will be a much-needed shot in the arm for UK plc. Figures from investment firm Dealogic suggest there have now been £73billion completed or pending deals this year and £8.5billion in withdrawn or cancelled advances.
This takes the total value of bids made for UK companies this year to more than £80billion.
Among those targeted are packaging group DS Smith, telecoms testing company Spirent Communications and haulage firm Wincanton.
FTSE 250 cyber-security group Darktrace recently backed a £4.3billion takeover by US private equity firm Thoma Bravo.
But the firms are increasingly putting up a fight against predators. Wood Group, which provides engineering services for the energy and materials industry, rejected a third buyout proposal from Dubai’s Sidara.
The Aberdeen-based group said the £1.5billion offer continued to ‘significantly undervalue’ it.
This was hot on the heels of Anglo American snubbing a ‘final’ offer from rival BHP on Wednesday, which valued the FTSE 100 company at £39billion. Direct Line and Currys have also fought off foreign takeovers.
It appears to reflect a change of sentiment in the Square Mile. French noted a ‘definite change of tone at board level from acceptance of offers to higher confidence to hold out for more and staring down short sellers’.
Allison Kirkby, chief executive of BT, last week chided investors who placed a record £300m bet against the FTSE 100 company.Several major institutions and hedge funds have taken ‘short’ positions in the stock – expecting the share price to fall.
But the telecoms boss said her plans mean ‘some of those shorts will start to diminish’. Kirkby said BT would aim to save another £3billion by the end of 2029.
However the UK is not out of the woods. Analysts at Jefferies picked out more than 70 possible takeover targets in Europe, including London-listed firms such as Entain and Pensionbee.
Lansdown: Stock has woken up
Hargreaves Lansdown co-founder Stephen Lansdown yesterday said the takeover bid has ‘woken’ interest in its shares.
Lansdown, who started the investment platform in 1981 with Peter Hargreaves, commented after the board rejected a £4.67billion approach from a consortium including the private equity group CVC and Abu Dhabi investors.
Hargreaves Lansdown shares ended the week 21 per cent higher despite retreating 2.7 per cent, or 30p, to 1090p yesterday.
Lansdown, 71, is the second-largest individual shareholder, with a 6 per cent stake. ‘It’s woken the stock up,’ he told Bloomberg. ‘It’s interesting to see that third parties are seeing the value and looking to take advantage of it. It’s nice the company’s value is being recognised.’
The comments come just a day after Hargreaves, the largest shareholder, with a near-20 per cent stake worth just over £1billion, said he was ‘looking at all options’.
Redcentric the latest target
Shares in IT services provider Redcentric rose 13 per cent as it became the latest London-listed firm to be targeted by a foreign bidder.
It said it was in the ‘early stages of discussions’ with Italian rival Wiit regarding an offer and there was ‘no certainty’ of a bid.
Under takeover rules Wiit, which specialises in providing cloud services and cybersecurity, must announce whether it wants to make a formal offer or walk away by June 21.
Redcentric shares soared 12.8 per cent, or 17.2p, to 152p, taking gains for the year to nearly 20 per cent.
The stock has hit its highest level since September 2020 but remains nearly a quarter off its peak in 2016.
It is valued at just over £200million.
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