A wave of overseas takeovers is targeting valuable British assets, raising alarms about the vulnerability of UK companies to foreign predators. Firms such as easyJet, ITV, and Segro, a large real estate investment trust (REIT) specializing in warehouses and data centers, are reportedly in the sights of potential buyers.
The REIT sector, in general, is seen as particularly vulnerable. Saba Capital, led by US investor Boaz Weinstein, is reportedly targeting REITs including Workspace and Grainger. While the Financial Conduct Authority has taken steps to curb some of Saba's tactics, these measures may not deter Weinstein.
Grainger, the UK's largest listed private landlord, provides rental housing to thousands. The potential acquisition of such a company by Weinstein, whose tactics are described as aggressive, raises questions about social desirability. These takeovers are not confined to financial centers, with regional impacts also evident. Ramsdens, a pawnbroker headquartered in Middlesbrough, is seeking to be acquired by a US operator, which its largest shareholder suggests is happening prematurely. Such a sale would represent a loss of prestige for the Teesside area.
In the North East, the privately held hydrogen power company GeoPura, based in Newcastle, 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 Series B funding round. Another company, Pragmatic Semiconductor, based in Durham, designs and manufactures ultrathin, flexible microchips. While it has attracted some UK investors, including M&G, its planned stock market flotation in the coming years could occur in the US.
Economists, including former Bank of England chief economist Andy Haldane, have expressed concern over the trend of foreign takeovers. Haldane has proposed using the tax system to encourage UK investors to allocate capital to British companies. Other suggestions include consolidating small pension funds. A more direct measure proposed is the abolition of stamp duty on share purchases. Reviving shareholder democracy, particularly by making voting easier for private investors using trading platforms, is also advocated.
The commentary suggests that a combination of factors, including political uncertainty and internal party strife, has deterred genuine overseas investment while creating an environment conducive to opportunistic takeovers. The underlying issue, according to observers, is the need for the UK to retain more of the value it creates domestically and for UK investors to recognize and capitalize on opportunities within their own market.