M&A volumes jump as US bidders snap up UK tech
US private equity firms are continuing to swoop for UK tech companies leading to a jump in merger and acquisition (M&A) volumes.
Giants from across the Atlantic have taken a heightened interest in UK stock, which analysts pegged to the “cheap and undervalued” nature of equities.
UK public M&A activity almost tripled in the first half of 2024, rising to 27 from 10. Meanwhile the total combined value of deals soared 353 per cent to £18.5bn.
Top bidders came from the UK (41 per cent) and US (35 per cent).
Patrick Sarch, head of UK public M&A at White & Case LLP, said the first six months of the year included “heightened interest from US bidders in the tech sector”.
He added: “We anticipate more bids for UK companies from US and corporate bidders and that the financial services, infrastructure, natural resources and tech sectors will continue to be active.”
June hosted the highest deals volume at 12, which included a trio of tech takeovers all in the span of 24 hours.
London’s tech takeover frenzy
This included London-listed semiconductor firm Alphawave, which was acquired by American chipmaker Qualcomm for $2.4bn, and Oxford Ionics getting snapped up for $1.1bn by New York-listed rival IonQ.
Spectris also revealed later in the day it was minded to accept a proposal by US private equity Advent. The firm confirmed at the end of June it had agreed to a £3.8bn takeover.
The continuous tech blows to the London Stock Exchange has raised concerns about the City market’s ability to attract fresh IPOs.
The Treasury has attempted to woo leading fintech firms in hopes of strumming up listings, but efforts have this far fell flat. UK fintech darling Wise transferred its primary listing to the US from London last month as it sought a deeper pool of liquidity.
White & Case data showed bid premiums – the extra amount paid over the market price – were lower than recent years, and stretched in variability.
Nikhil Rathi, chief executive of the Financial Conduct Authority, sounded the alarm on the pricing of UK stock in a Treasury Committee hearing last month.
The City regulator’s chief said: “There is this question around how attractive UK companies have become, particularly to US buyers”