Market observations
• Overall UK takeover activity was relatively subdued over Q1 2023 , as expected, with just 11 new firm offers announced with an aggregate offer value of £2,465 million. The number of new offer periods commencing was down 25% vs. Q1 2022.
• Bid activity was focused on the smaller end of the market:
- 10 of the 11 firm offers were for companies with undisturbed market capitalisations below £250m
- 3 new formal sale processes were initiated by smaller companies
- The all-share merger of finnCap Group and Cenkos Securities further pointed towards the merits of relative scale in the current capital markets environment
• After a quiet 2022, private equity showed signs of increasing activity with two-thirds of firm offers extending from a PE or privately owned bidder during the quarter
• In contrast, overseas strategic interest has been lower than expected as corporate activity has remained more domestically focused in the context of continuing febrile political and economic conditions
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