With global markets in turmoil, look closer to home for British bargains you can take advantage of in a perfect storm

After the chaos, the hunt for bargains begins. This week saw a sharp sell-off in global stock markets, triggered by fears of a US recession and the cancellation of bets on the Japanese currency, the yen.

But while volatility may continue, the bold seem keen to seek opportunities in the US, Japan and the UK.

The FTSE 100 was caught in the slump but recovered midweek. This evidence of its resilience may increase the focus on British stocks. The perception that British stocks are unloved and look cheap has been fuelling a wave of takeovers in recent months, with M&A activity up 84 per cent on a year ago.

If you’re looking at your portfolio after the turmoil, taking a chance on some British names could be a useful diversification.

He could profit if a bid for a company goes through, but if it doesn’t, he’ll have a stake in a business that should be boosted by an improving economy.

In the past two weeks, for example, rat-catcher Rentokil has emerged as a potential target, fuelled by rumours that former BT boss Philip Jansen could lead a raid on a private equity firm.

Yesterday, broker Hargreaves Lansdown agreed to sell itself to private equity suitors for £5.4bn.

But among the British companies that have already succumbed to the attackers are Dechra Pharmaceuticals and Keyword Studios, both acquired by EQT, the Swedish private equity group.

EQT made five successive bids for gaming services provider Keyword and eventually agreed a price of £2.2bn, almost 70 per cent more than its first offer.

The £3.7bn bid for Royal Mail parent International Distributions Services by EP Global Commerce, the vehicle of Czech businessman Daniel Kretinsky, has been the subject of an investigation under the National Security and Investment Act this week.

While the outcome of this investigation is awaited, the race is on to find the next potential targets, with the kind of credentials, including debt levels, profit margins and price-earnings multiples, that are likely to attract bidders.

Canaccord Genuity’s analytics tool Quest has identified 16 companies that could give your DIY portfolio a summer facelift. Here are some of the likely candidates:

MONEY SUPERMARKET

Companies that predators may be eyeing include media, mining, oil and pharmaceuticals. But Canaccord Genuity believes there could be particularly interesting opportunities in the financial services sector, with nine companies considered susceptible to attack.

The best known of these is price comparison platform Moneysupermarket, which owns Moneysavingexpert, the website of financial guru Martin Lewis.

Moneysupermarket shares are down 21% this year to 215p after plunging this week. However, analysts reckon they could rise to 283p. Perhaps a predator wants to strike before the price reaches that level?

INTELLIGENT

The biggest financial services company on Canaccord Genuity’s list is Wise, a £7.38bn international payments fintech. The once-high-profile company says it is being forced to spend more to attract customers, a setback that has sent its shares down 19 per cent this year to 686 pence.

Despite these challenges, Wise believes it has the “technology, scale and infrastructure” needed to excel and analysts agree. Berenberg analysts estimate the price could rise to 1,140p, making Wise shares worth a bet. The average target price is 932p.

LION TRUST

Last year, Liontrust Asset Management was also looking to acquire GAM’s business. The deal fell through and Liontrust may now be vulnerable.

Its shares have remained stable over the past 12 months. Even if no bidder emerges, analysts rate the stock as “buy” or “hold” and expect the price to rise again to 811 pence.

INDIVIDUAL

Pharmaceutical group Indivior has been forced to suspend sales of its schizophrenia drug Perseris. Meanwhile, US demand for its opioid addiction treatment Sublocade has weakened. As a result, the shares have fallen 48 percent in the past 12 months to 983 pence.

But US investor Oaktree Capital Management does not seem to be deterred, having just increased its stake in the troubled company. This suggests that Indivior could be taken over or improve its situation.

For investors, either outcome would be desirable.