UK-listed companies are being bought at a pace that Peel Hunt says amounts to "selling the family silver", as takeover bids swamp new listings in London.
"To say that the UK has a problem in retaining its companies and listing new ones would be a massive understatement in our view," wrote Charles Hall, the broker's head of research.
With Sir Keir Starmer's resignation expected to usher in Andy Burnham as the new Prime Minister, along with a likey change in chancellor too, Hall argued there was an opportunity to reverse the decline through changes to pensions, ISAs and tax policy aimed at boosting demand for UK equities.
There had been 154 bids for UK companies worth more than £100 million since the start of 2023, according to Peel Hunt analysis, with a combined value of £165 billion.
Over the same period, there have been just 11 IPOs of that size, worth £6 billion.
The imbalance shows how serious the problem is in retaining listed companies and attracting new ones, said Hall.
There are 29 bids currently running this year, worth £61 billion, following 40 bids worth £35 billion in 2025.
The activity has also moved up the market, with five current FTSE 100 offers and nine in the FTSE 250.
Current FTSE 100 bid situations include approaches for Beazley, Schroders, Intertek, DCC and Segro, together worth more than £45 billion. FTSE 250 targets include accepted deals for Tate & Lyle and Senior, while easyJet and Spire Healthcare are in negotiations.
Overseas buyers account for 18 of this year’s bids, or 62%, continuing a pattern seen in recent years.
Hall said UK companies are seen as "attractively valued", ie lowly, "which makes M&A more likely and IPOs less likely"/.
Persistent outflows from domestic equity funds over the past five years "inevitably depresses valuations and results in lower demand for IPOs", while the openness of the UK takeover regime is all helping to drive activity.
He said the UK’s position in global indices was also part of the problem, as the UK becomes a smaller part of MSCI World, currently 3.5%, international funds have less reason to own UK shares.
Hall said the UK equity market could be revived with a series of policy changes, arguing that "turbocharging UK equity markets is not difficult and can be done at pace".
"We could match tax benefits to domestic investment", he said, suggesting there could be a "default pension fund" with a 20%-plus UK weighting.
A minimum UK weighting could also be prescribed for ISAs, while capital gains tax relief for listing in the UK would be "truly compelling" for founders.
Quoting tax expert Dan Neidle, Hall added that removing stamp duty on shares "provides the biggest economic return for any tax change".
