Takeover Frenzy Sees More Firms Depart London Stock Market

The pace of takeovers has accelerated, with two more firms agreeing to be acquired, adding to a growing trend of companies departing the London Stock Exchange. This has fueled concerns about the overall health of the UK stock market.

Regeneration specialist Harworth Group has accepted a revised offer worth £632 million from its largest shareholder, Peel Holdings. This follows Harworth's rejection of an earlier bid from the infrastructure, ports, and property group. Peel has also increased its stake in Harworth to 52 percent.

Separately, shares in Capricorn Energy surged to a 15-year high after its board approved an improved £330 million takeover bid from rival Genel Energy. This sweetened offer came after a bidding war, which had previously seen Norwegian firm DNO make a counter-offer.

These potential delistings follow a pattern seen earlier in the year. Lloyd's of London insurer Beazley and investment firm Schroders are set to cease trading on the London Stock Exchange next week after agreeing to deals with foreign buyers. Other notable companies targeted include warehouse giant Segro, budget airline easyJet, ingredients maker Tate and Lyle, and Evoke, the owner of bookmaker William Hill.

The wave of takeovers has occurred alongside a shortage of new listings through initial public offerings (IPOs). Market analysts have expressed concern that this trend is leading to a shrinking of the UK stock market.

"The departure of Beazley and Schroders will leave investors with less choice in the listed insurance and asset management sectors, respectively," said Dan Coatsworth, head of markets at AJ Bell. "The delistings provide a stark reminder that the UK stock market is slowly shrinking."

However, there have been some positive developments. This week, payments company Airtel Money announced plans for an IPO, which could be London's largest listing in five years. "Airtel Money’s IPO announcement this week is a positive, but the market needs the taps to fully open on new listings, not the odd drip we’ve seen in recent years," Coatsworth added.

Harworth's agreement with Peel involved an offer of 187 pence per share. Capricorn's board backed Genel Energy's revised offer of 433 pence per share, valuing the company at £330 million, an increase from Genel's initial £270 million bid and surpassing DNO's £300 million counter-offer. DNO declined to comment on whether it would increase its bid further.

Following the news, Capricorn shares rose by 14.7 percent, while Harworth shares gained 5 percent.