Looking further into 2025, we expect deal activity to remain strong, as we continue to see a healthy pipeline of interest in UK-listed assets from both private equity backed and strategic buyers. Relative political stability caused by definitive results in both the UK and US elections, and stabilising/slowly reducing interest rates should create increased appetite for exploring M&A.
UK-listed companies are expected to remain attractive, particularly to PE and overseas bidders, having comparatively low valuations to their US peers, and a significant number of AIM-listed companies are likely to feel vulnerable to approaches as boards continue to navigate a challenging equity capital markets environment.
We expect high value bids to continue, including by consortium, with a stronger financing market and a wealth of access to ‘dry powder’ likely to fuel this trend.
Regulation remains one of the biggest challenges for bidders, with investigations recently seen on the offers for Royal Mail and Redrow, and bid parties will need to navigate shareholder activism, in an environment where shareholders are questioning offer valuations.
