A significant wave of overseas takeovers is targeting British companies, leading to concerns that valuable UK assets are being stripped away. Former Bank of England chief economist Andy Haldane has expressed alarm at this trend, suggesting that current economic policies and internal political strife may be deterring genuine foreign investment while creating opportunities for foreign predators.
Several high-profile British firms are reportedly in the sights of potential buyers. These include easyJet, the broadcaster ITV, and Segro, a major Real Estate Investment Trust (REIT) specializing in warehouses and data centers. The vulnerability extends to the entire REIT sector, with US raider Saba Capital, led by Boaz Weinstein, reportedly targeting companies such as Workspace and Grainger. Saba Capital's tactics have drawn scrutiny, and while the Financial Conduct Authority (FCA) has moved to clamp down on some of its practices, it is unclear if this will deter Weinstein.
These takeovers have implications beyond financial markets, impacting real-world sectors. Grainger, for instance, is described as the UK's largest listed private landlord. The potential acquisition of such companies by foreign entities raises questions about the social desirability of these assets changing hands, particularly when the tactics of some buyers are compared to those of political figures.
The issue is not confined to London's financial district, with effects felt in regions like the North of England. Ramsdens, a pawnbroker headquartered in Middlesbrough, has seen strong performance but is reportedly considering a sale to a US operator. This potential sale is viewed by some as a blow to Teesside, risking the loss of a publicly listed company and meaning that future benefits would accrue to investors on Nasdaq rather than the UK's AIM growth market.
Another North East-based company, GeoPura, a privately held hydrogen power firm, has been acquired by Canada's Ballard Power Systems for £275 million. This deal occurred after GeoPura struggled to attract interest from UK investors during a funding round. Similarly, Pragmatic Semiconductor, a Durham-based designer and manufacturer of flexible microchips, secured investment from UK sources including asset manager M&G, but its potential future stock market flotation is being considered for either London or the US.
To counter this trend and retain value within the country, proposals have been put forward to encourage domestic investment. Andy Haldane's suggestions include utilizing the tax system to steer UK investors towards British companies and consolidating smaller pension funds. A more direct measure proposed is the abolition of stamp duty on share purchases. Additionally, there is a call to revive shareholder democracy by simplifying and clarifying voting procedures, especially for private investors using trading platforms. The overarching aim is to ensure that the value created by UK businesses remains in the UK and to highlight the investment opportunities available to domestic investors.