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Analysts fear worse could be in store for the capital’s flagship bourse this year, from FTSE 100 giants to small-cap warriors
When foreign private buyers swooped in to pluck the likes of Ted Baker and Go Ahead from the London Stock Exchange in 2022, jitters and nervous whispers quickly took hold in the City.
For many bourse watchers, it seemed the first half of 2023 would be the period London’s discount finally came home to roost. Scores of firms were expected to be taken into private hands as the fabled pile of private equity ‘dry powder’ finally began pouring into the market.
What followed was something of a damp squib in the subdued opening months of the year. But after a buoyant second half and predictions of rate cuts on the horizon, private equity firms and corporate buyers are said to be limbering up for a deal offensive once again.
Analysts and lawyers at top City firms say they have been prepping for a wave of deals in London after bosses began prepping companies for sale in the final months of 2023.
Charles Hall, head of research at investment bank Peel Hunt, said today the “trends are clear” as private firms look to take advantage of lacklustre valuations and the flow of cash away from London’s public markets.
We have some tremendous UK listed companies which continue to look undervalued
John Farrugia, co-chief of investment bank and broker Cavendish
“The key takeaway is that the pace of de-equitisation is relentless and will likely continue unless action is taken and impacts quickly,” Hall wrote in a note to investors. “This is driven by the low UK valuations, which makes it an attractive hunting ground for acquirors and is a key factor behind the dearth of IPO activity...
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