Despite continued global economic and geopolitical uncertainty, and with the UK general election today, H1 2024 has seen improved levels of public M&A activity in the UK. There was a total of 30 firm offers announced in H1 2024 for UK public companies listed on the Main Market or AIM (25 in H1 2023). A further 10 public companies are currently subject to a 28-day put up or shut up (PUSU) period, and there have been six formal sale processes. Average deal values were significantly up (over 230% against H1 2023), with 10 of the firm offers announced being more than £1 billion (4 in 2023).
Whereas 2023 saw the revival of private equity backed firm offers (63%), 2024 has so far been dominated by UK and international strategic buyers. Unsurprisingly, given the notable increase in average deal values, 18 of the 30 firm offers in H1 2024 (60%) were made in respect of public companies listed on the Main Market (32% in 2023), 11 of which were in the FTSE 250. Although average deal values are up, we continue to see some shareholders publicly or privately object to the price recommended by target boards, with some shareholder votes passing by a small margin.
The most active sectors have included real estate, computer/electronics and construction/industrials. H1 2024 has also featured a significant number of overseas (mainly US) bidders, as well as a higher number of competitive bids than has been seen in recent years.
We are optimistic about the outlook for H2 2024, although remain wary of challenges to the equity markets as a result of elections in the UK, the US and across Europe. We continue to see a good level of interest in UK public assets, both from corporates and sponsors. The new listing rules we are expecting to come into force during the summer may create more opportunities for listed companies to engage in M&A generally, and could result in an increased number of listed bidders launching offers.
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