UK Takeover Trends - 2022 A Year of Two Halves
Looking ahead, while we expect UK takeover activity to remain relatively subdued during Q1 2023, we observe building ambition from management teams to push forward. However, overall boardroom sentiment might be held back by the immediate headwinds as households seek to re-calibrate their financial positions to accommodate huge increases in their two largest monthly outflows: energy bills, and mortgage payments or rent.
A period of relative political stability, and emerging clarity over inflation and interest rates, could drive early movers to become increasingly active in Q2. Moving into H2 2023, absent an unexpected shock, we anticipate a more widespread recovery in takeover activity with overseas acquirers, UK consolidators and private equity each becoming more front-footed about deploying capital and pursuing their strategic ambitions.
In the report, we reflect on the five key trends of 2022 and we consider the demand and supply drivers that we believe will affect future activity.
- Sharp slowdown in activity by both volume and value
- Tight debt markets constrain public-to-private transactions
- FTSE 250 takeovers meaningfully down in H2; small-cap consolidation continues
- Overseas inbound interest more cautious of late
- Premiums trending upwards, based off depressed share prices, but fewer data points
The 2022 annual report on UK takeover trends can be found here
