Leading investors slammed the ‘absurdity of UK stock market valuations’ as foreign predators snapped up yet another British company.
In the latest swoop on UK plc by overseas suitors, US technology group Viavi Solutions has agreed to pay 175 p per share to buy Crawley-based telecoms firm Spirent.
This values the FTSE 250 company – which tests, measures and analyses telecoms devices – at £1billion and is roughly a 61 per cent premium to its closing price on Monday.
The proposed deal adds to the growing list of British businesses who have been targeted by foreign buyers in recent months.
This includes Wincanton, Currys, All3Media and Direct Line.
In the latest swoop on UK plc by overseas suitors, US technology group Viavi Solutions has agreed to pay 175 p per share to buy Crawley-based telecoms firm Spirent
Interest in UK plc has spiked since Covid as bidders looked to take advantage of bargain price tags and the weak pound in a wave of ‘pandemic plundering’.
This pattern has lingered into the post-Covid world as opportunistic investors flock towards London’s knock-down prices.
This has fuelled concerns that British companies are being snapped up on the cheap.
Fund managers at JO Hambro Capital Management, a top ten investor in Currys, have attacked the lowball approaches being made by international predators.
Clive Beagles and James Lowen, senior managers at the fund, said the interest in Currys ‘clearly shows the absurdity of UK stock-market valuations’.
Richard Bernstein, boss of activist investor Crystal Amber, also raised alarm bells over the current City landscape.
‘Another day and another FTSE 250 company is being bought by a US predator,’ he said. ‘Several more bids are surely in the works.
‘It’s like a holding bay at an airport runway as planes queue ahead of take-off. US trade buyers understand that they’re acquiring bargains.’
There are signs that British boards are taking a stand against foreign predators.
Last week insurer Direct Line revealed it has rejected a ‘highly opportunistic offer’ worth £3.1billion from Belgian firm Ageas.
And in a sign more bids are being turned down, the number of failed takeovers of London-listed companies has more than doubled in recent years.
Data from the London Stock Exchange shows the proportion of takeover offers for UK-listed companies that were withdrawn rose to 17 per cent between 2021 and 2023 from 8 per cent between 2014 and 2020.
But despite these failed deals, Spirent’s board yesterday said it will back a takeover by Viavi.
Neil Wilson, the chief markets analyst at Finalto, said: ‘Another tech firm bites the dust.’
£1bn offer would seal Currys deal
A bid of around £1billion would be enough to buy takeover target Currys, according to one of the chain’s leading investors.
JO Hambro Capital Management (JOHCM) UK Equity Income fund, a top 10 shareholder in the electrical retailer, said an offer between 80p and 100p a share would be ‘acceptable’. A 90p bid would value the business at around £1billion.
The comments come a week after Currys rejected a 67p a share offer worth £757million from US activist investor Elliott Advisers.
Elliott, which owns book shop Waterstones, previously had a 62p approach rejected.
The second move was then also rebuffed with the firm’s board claiming it ‘significantly undervalued the company and its future prospects’.
Chinese retail giant JD.com has also said it is considering a possible deal to buy Currys.
JOHCM UK equity income fund yesterday said it believed the value of the deal compared to the size of the retailer’s sales showed the current ‘absurdity’ of the UK stock market.
Clive Beagles and James Lowen, senior managers at the fund, said: ‘Currys’ core business generates approximately £9.5billion in sales.’
