Investors bemoan the ‘absurdity’ of UK stock market, as foreign predators swoop on ANOTHER London-listed company

Leading investors criticized the “absurdity of UK stock market valuations” as foreign predators snapped up another British company.

In the latest attack on UK plc by foreign suitors, US technology group Viavi Solutions has agreed to pay 175 pence per share to buy Crawley-based telecommunications company Spirent.

This values ​​the FTSE 250 company, which tests, measures and analyzes telecoms devices, at £1bn and represents around a 61 per cent premium to its closing price on Monday.

The proposed deal adds to the growing list of British companies that have been targeted by foreign buyers in recent months.

This includes Wincanton, Currys, All3Media and Direct Line.

Interest in UK plc has soared since Covid, as bidders sought to take advantage of bargain prices and sterling weakness in a wave of “pandemic looting”.

This pattern has persisted in the post-Covid world as opportunistic investors flock to London’s crash prices.

This has fueled concerns that British companies are being snapped up on the cheap.

Fund managers at JO Hambro Capital Management, one of Currys’ top ten investors, have attacked the low-key approaches being taken by international predators.

Clive Beagles and James Lowen, senior managers at the fund, said the interest in Currys “clearly shows the absurdity of UK stock market valuations”.

Richard Bernstein, head of activist investor Crystal Amber, also sounded the alarm about the city’s current outlook.

“Another day and another FTSE 250 company will be bought by an American predator,” he said. Several more offers are surely in the works.

“It’s like a waiting area on an airport runway where planes queue before takeoff. “American business buyers understand they are getting a bargain.”

There are signs that British boards are taking a stance against foreign predators.

Last week, insurer Direct Line revealed it had rejected a “highly opportunistic offer” worth £3.1bn from Belgian company Ageas.

And in a sign that more offers are being rejected, the number of failed takeovers of London-listed companies has more than doubled in recent years.

Data from the London Stock Exchange shows that the proportion of takeover bids for UK-listed companies that were withdrawn rose to 17 per cent between 2021 and 2023 from 8 per cent between 2014 and 2020.

But despite these failed deals, Spirent’s board said yesterday that it will support an acquisition by Viavi.

Neil Wilson, chief markets analyst at Finalto, said: “Another tech company bites the dust.”

£1bn offer would seal Currys deal

A bid of around £1 billion would be enough to buy Currys, the target of the takeover, according to one of the chain’s main investors.

JO Hambro Capital Management (JOHCM) UK Equity Income fund, one of the electricity retailer’s top 10 shareholders, said an offer of between 80 and 100 pence per share would be “acceptable”. A 90p bid would value the business at around £1bn.

The comments come a week after Currys rejected a 67p per share offer worth £757m from US activist investor Elliott Advisers.

Elliott, owner of Waterstones bookstore, had previously rejected a 62p approach.

The second measure was also rejected, with the company’s board of directors stating that it “significantly undervalued the company and its future prospects.”

Chinese retail giant JD.com has also said it is considering a possible deal to buy Currys.

UK equity fund JOHCM said yesterday it believed the value of the deal compared to the size of the retailer’s sales showed the current “absurdity” of the UK stock market.

Clive Beagles and James Lowen, senior managers at the fund, said: “Currys’ core business generates approximately £9.5bn in sales.”