Hostile Takeovers in UK at 12-Year Low
Byline: Janine Brewis
Hostile takeovers have fallen to their lowest level in the UK for 12 years, according to research by JP Morgan, although advisers expect an increase when financial markets stabilise.The research, by Paul Gibbs and Philip Case, mergers and acquisitions analysts at JP Morgan, shows that UK announced hostile deal volume dropped from $9bn ([euro]8.4bn) in 2001 (excluding Lloyds TSB's blocked $29bn bid for Abbey National) to $1bn last year.
No companies launched hostile bids worth more than $1bn in the UK last year, and the largest was Taylor & Francis' $425m bid for Blackwell Publishing, its UK rival.
Advisers say clients are wary of launching hostile deals while capital markets are in such a poor state. Companies are more conscious than before of the need to carry out thorough due diligence before submitting an offer, which requires co-operation from the target company's management.
Private equity firms also need access to a target company's books before they can put in place bank financing.
Giles Money-Coutts, head of UK M&A at SG, says: "As people believe we have hit the bottom or are beginning an upturn there will be circumstances in which people will be prepared to go in on a blind basis when businesses are cheap. …