The volume of takeovers of UK companies is reshaping the London equity market, broker Peel Hunt says, with midcap companies being taken out in an “unprecedented” wave and at higher premia than have been seen before.
A simultaneous lack of IPOs is compounding the reduction in listed UK growth companies, said head of research Charles Hall.
There have been 38 bids worth more than £100 million announced so far this year, with a combined equity value of £33 billion.
Activity has been heavily concentrated in the FTSE 250, Hall noted, where there have been 16 approaches year-to-date, equating to 13% of the index since the start of 2024.
Examples have included Spectris PLC (LSE:SXS) at a 101% premium to its undisturbed price, Deliveroo PLC (LSE:ROO) at a 29% premium, and Alphawave IP Group PLC (LSE:AWE) at 96%.
No deals have topped £4 billion and no FTSE 100 companies have so far received offers in 2025, after a handful of bids in the prior year.
Bid premiums averaged 40% against undisturbed share prices, higher than historic norms, while overseas buyers accounted for 61% of activity.
By sector, funds and real estate saw the highest levels of activity, while multiple contested situations underlined the competitive environment.
Hunt said reforms are "essential" that to "ensure the health of the ecosystem and enable companies to grow, scale, and remain in the UK.
"We are seeing continued outflows of UK capital, which need to be addressed through pension and ISA reform."
But he expects the IPO market to "gradually improve" in the final few months of the year, with a stronger pick-up in 2026.