LIVE MARKETS-UK M&A flurry should concern policymakers - Peel Hunt

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

UK M&A FLURRY SHOULD CONCERN POLICYMAKERS - PEEL HUNT

The uptick in UK M&A deals in the second quarter of 2025 should be concerning to policymakers as it reflects the outflow of capital from the country and resulting low valuations, according to boutique investment firm Peel Hunt.

"Over the last 18 months, there have been bids for 32 FTSE 250 companies, equating to 13% of the total. This is an unprecedented scale of companies being removed from the market," head of research Charles Hall and his team write in a note.

Such trends are fuelling debate on public markets and increasing recognition of the need for domestic capital to back UK companies.

"The necessity is clear, with 31 companies in bid talks in 1H and just one IPO with a market cap of over £100m."

All in all, the second quarter clocked 19 bid situations in the UK.

Peel Hunt suggests the issue needs to be addressed through pension, ISA, and stamp duty reform.

"We also need a UK-focused fund to provide capital for private companies as they scale, as well as supporting IPOs and public companies."

They flag Chancellor Rachel Reeves' upcoming Mansion House Speech on 15 July as a key event to launch new policies.

"There has been a clear focus on private markets - we now need to address public market," says Peel Hunt.

So far in 2025 there have been 31 bids in the UK valued at over 100 million pounds in market cap, totalling an equity value of 24 billion pounds. By way of contrast, the whole of 2024 saw 45 bids totalling 52 billion pounds.

Meanwhile the IPO market continues to be very quiet with just one flotation over 100 million pounds in the first half and only three last year.

Of the bidders, 70% were corporates in the first half according to Peel Hunt, while 30% were financial buyers, and 60% were overseas bidders.

On a sector basis, funds and real estate both attracted six bids each.

(Lucy Raitano)

EARLIER ON LIVE MARKETS:

BANKS PROP UP STOXX, RELIEF FOR WIND STOCKS CLICK HERE

EUROPE BEFORE THE BELL: FUTURES RISE, UK DEALMAKING EYED CLICK HERE

MARKETS SIT TIGHT FOR TRADE PROGRESS CLICK HERE