Bargain basement Britain: Tech takeovers continue with three billion-pound swoops in a day
The frenzy of UK tech takeovers showed no signs of slowing down on Monday after three separate billion-pound M&A moves were made within hours of each other as US tech giants continued their hunt for British bargains.
First to announce a move on Monday was London-listed semiconductor firm Alphawave, which confirmed it had reached an agreement with American chipmaker Qualcomm in a cash and shares deal that valued the company at $2.4bn (£1.8bn).
That was followed later in the morning by quantum computing business Oxford Ionics, which signed a $1.1bn deal to be taken over by New York-listed rival IonQ. In the afternoon, precision and testing equipment specialist Spectris saw its shares rocket after the firm unveiled it had received a £3.7bn takeover offer from US private equity company Advent. Spectris said it was minded to accept the proposal.
The moves, which would represent a combined £6.3bn in M&A transactions if all go ahead, lay bare the continued undervaluation of UK tech businesses by British investors as deeper-pocketed US rivals swoop in for cheap deals.
All three tech firms received takeover proposals with an offer price well above their domestic valuations. Alphawave’s offer of 183p per share represented a near-doubling of where the stock had been trading prior to the deal’s emergence in April, while the Spectris proposal represented a premium of more than 60 per cent. The billion-dollar offer for Oxford Ionics, a private company, dwarfs the valuation it fetched at its £30m raise in 2023, which is unlikely to have exceeded £200m.
London Tech Week blow
The deals come just days after food app Deliveroo was acquired by US rival Doordash and fintech firm Wise moved its primary listing from London to New York, highlighting the difficulty of keeping British startups in the UK. The moves are likely to come as a blow to PM Keir Starmer, who sought to tout the success of the sector during a visit to London Tech Week on Monday, in which he spoke alongside billionaire Nvidia chief Jensen Huang.
“Today has delivered a double blow for London markets,” said Danni Hewson, head of financial analysis at AJ Bell.
“Whether or not the writing was on the wall from the start after Alphawave’s discouraging IPO, this is exactly the kind of tech company that the UK struggles to support and exactly the kind of company the UK needs to thrive. Considering that its US suitor has agreed to pay handsomely for the company, it’s clearly a business that has value to Qualcomm and its plans to expand data centres.
“Many UK companies still look cheap and that’s likely to keep the takeover offers coming.”