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magazineBrace yourself for more British takeovers
Further weakness in the sterling could lead to a second wave of incoming M&A as foreign companies would find it even cheaper to buy UK businesses.
Already in 2017 consumer goods giant Unilever (ULVR) has fought off a £115bn bid from Kraft Heinz. Engineering consultant WS Atkins (ATK) earlier this week received a £2bn takeover approach from a Canadian rival.
‘Although there were, on average, more than two deals per week with a transaction value of more than £100m in the six months after the Brexit vote, the frequency for mergers has now stepped up a gear,’ says Canaccord Genuity Wealth Management.
Its senior equity analyst Simon McGarry has identified 14 stocks which look particularly attractive to foreign companies including transport firm Go-Ahead (GOG) and civil engineer Costain (COST).
The exercise involved looking at the free cash flow yield of firms based on them being acquired in a leveraged buyout (that is a takeover at least partly funded by debt). (TS)
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