ALEX BRUMMER: Keeping procurement predators at bay
True grit is a quality missing when it comes to lazy directors of UK companies facing overseas takeovers or from public to private companies.
Fighting the good fight is no easier for long-term UK investors who have evacuated equity investments in London, leaving the field open to US asset managers and a variety of activists, hedge funds, capital demons private sector and get-rich-quick merchants.
It is hugely encouraging that Jonathan Milner, founder and 6.1 per cent shareholder in Cambridge-based life sciences pioneer Abcam, is putting up the barricades and gaining strength against the £4.5bn takeover by US giant Danaher.
It doesn’t help that the current management, led by Alan Hirzel, has so easily raised the white flag and been responsible for moving Abcam’s share price from Aim (where it had been based since 2005) to the Nasdaq in 2020. Last time left the UK listing. year.
New York is not proving to be the cash cow for British companies, as evidenced by the huge discount on Abcam shares before the company went up for sale. My concern is that over time UK trained science and qualified researchers will be absorbed abroad.
Shake it up: True determination is a quality missing when it comes to lazy directors of UK companies facing overseas takeovers or public-to-private companies.
The UK is brilliant at science and technology, which is why the EU wanted Britain to return to Horizon and why the latest Times Higher Education rankings have three British campuses in the world’s top ten.
Oxford is in first place, Cambridge fifth and Imperial College eighth. No European university is in the top ten.
British broker Peel Hunt has been hired to fight Danaher’s deal for Abcam and has written to shareholders urging them to vote against the deal. As founder, Milner wants to displace Hirzel as boss and get back on track.
Milner cannot ask the arbitrator of the UK deal, the Takeover Panel, to set the rules. He has no jurisdiction because the London listing has disappeared. With a biotech company vital to the UK’s cancer fight at stake, Business Secretary Kemi Badenoch has a powerful argument to invoke the National Security and Investment Act. There is a lot of talk about the premium offered in offers of this type.
Compared to the reduced share price, Danaher’s 40 percent premium becomes meaningless. The current London discount has turned the FTSE and its exiles into an all-too-happy hunting ground for predators.
Australian vampire Macquarie is on the prowl again. Waste management group Renewi has told him to miss out after making a £636m hostile cash bid for the company.
He is bypassing the board of directors in seeking shareholder support. Macquarie has a controversial history in the UK and Renewi’s board is right to resist.
Regulators on both sides of the Atlantic are currently agitated by inflated valuations of private markets in a world where higher borrowing costs are a new reality, vastly changing financing models.
The shift from public to private, which presents risks of disclosure and tax evasion, must be firmly opposed.
In terms of rankings, it is worth noting that, despite dire warnings about the threat Brexit poses to the City, it remains as firmly entrenched as ever as a financial centre. The Global Financial Centers Index shows that, despite losing a handful of listings to Wall Street, London is second only to New York, and is gaining ground.
The closest European competitor, Geneva, is in 10th place and will not be helped by the Credit Suisse debacle.
Despite President Emmanuel Macron’s stances, Paris is stuck in 15th place behind Frankfurt. A top American banker recently made it known that he enjoyed fine French entertainment, but that the operation he had set up in Paris was simply a slim duplicate in case things got tough after Brexit.
Amid turmoil in China, the UK’s largest bank, HSBC, a veteran of the 19th century ‘Opium Wars’ and more, is doubling down, buying Citigroup’s consumer wealth operations in the Republic Popular with £2.5 billion in assets. It may be politically dubious, but it shows brave long-term thinking.
There is no way to quench the vaunted ambition of Saudi Supreme Leader Mohammed bin Salman. Not content with squeezing Western oil consumers, the aforementioned state-controlled oil giant Aramco has acquired a strategic stake in US natural gas extractor MidOcean Energy for $500 million.
A small but critical step in what is a push to become a leading player in liquefied natural gas (LNG). Beware.