The US market’s top tier of listed companies could soon welcome three new entrants as a batch of much-talked-about companies – Anthropic, SpaceX and OpenAI – prepare to float. Given the scale of their expected market valuations, these IPOs will mean changes in the S&P index.
Change is also under way at London’s main index, but this is an entirely different story.
Rather than exciting new arrivals, it’s a question of departures, with unexpected promotions following for smaller companies, as overseas takeovers of British plcs pick up pace again. This time, unlike in the final quarter of 2025 when bids were almost entirely for non-FTSE 100 stocks, predators have been circling large-cap territory targeting index stalwarts such as Beazley, Hiscox, Intertek, Schroders and DCC.
Three of the five have accepted offers, although not before putting up varying degrees of resistance. Testing specialist Intertek rejected three bids because they fundamentally undervalued the group, and even launched its own strategic review before it decided to back Swedish private equity giant EQT’s £10.6bn takeover offer. At the time of writing, Hiscox and DCC had not accepted bid interest, but there is speculation that Legal & General and Melrose could be next in line for predatory offers.
Life as an independent entity is also coming to an end for several FTSE 250 constituents. Ingredients group Tate & Lyle, which launched a turnaround plan to fatten up its share price last November after another tough year, has received a £2.7bn bid from US company Ingredion. Flavourings specialist Treatt has accepted a £183mn offer from German ingredients group and major shareholder Döhler after months of speculation. At a decent 45 per cent premium, investors won’t have been left with a bitter aftertaste. Back in the mid-cap index, high-tech engineer Senior has agreed to a £1.4bn takeover by a consortium led by Tinicum and Blackstone.
You get the drift. Lots of companies are disappearing from the UK market – more than 100 in the past couple of years – and although some balance may be restored with the likes of Boots and Waterstones expected to go public later this year, listings have largely been in hibernation. The result is that investors’ choice and access to high-quality investment opportunities have been reduced. The economy loses too because a thriving market that keeps the cost of capital low and supplies plenty of it is a powerful driver of growth.
There is also evidence to suggest growth rates at public companies that have been dragged into private ownership suffer. Maintaining a domestic share quote is “a proven anchor to the UK, ensuring jobs and intellectual property are more likely to remain here”, says the Quoted Companies Alliance (QCA).
A shrinking stock market is not uniquely a UK problem – the trend is evident in the EU and even in the US, and is viewed universally as a serious economic threat.
But Britain’s problems are compounded by the pound’s depreciation in the wake of Brexit, which delivered additional buying power to overseas buyers through depressed corporate valuations, and the deluge of global events that have stripped away the protection of healthy revenues and positive ratings.
Aerospace engineer Senior’s powerful market position deserved a re-rating, but its suitors got there first with a successful bid in April. Iran war-related turbulence has turned easyJet into a target as its share price plummeted from 522p at the start of the year to below 340p. So enticing is this temporary discount that not even the prospect of regulatory hurdles has dissuaded investment firm Castlelake from expressing interest in buying the company.
Lack of capital funding is another issue, in particular for high-growth UK companies that continue to struggle to raise funding for scaling up.
Perceived liquidity risks are a further barrier to securing capital further down the market cap scale, with the risk of fund redemptions forcing managers away from small and microcap stocks.
“To manage liquidity risks, authorised corporate directors who oversee fund operations and regulations now favour larger, more liquid assets that sell quickly during outflows. This shift has starved companies valued under £100mn of vital capital, meaning stock market liquidity now overrides strong business fundamentals when a fund manager is making an investment decision,” says Niall Pearson at broker Hybridan.
Takeover bids in the UK today are opportunistic in the extreme and are not doing investors any favours. They appear when there is a valuation gap, when there is high-quality technology knowhow to be snapped up, where a lucrative market position has been built up, and when there are assets that can be sold off for short-term profit.
Don’t be fooled by the seemingly fat premiums on offer – no predator is paying the real price for the companies they are picking off.