UK faces swarm of takeover bids within the new yr: One in three AIM shares in danger, says Investment financial institution Peel Hunt

Corporate Britain faces ‘a swarm of takeovers’ next year with a third of AIM companies vulnerable to bids, according to City experts.

In a stark warning, investment bank Peel Hunt forecast a ‘major and sustained’ wave of offers for London-listed firms in the new year.

And it cautioned there were ‘barbarians at the gate’, a reference to the bitter takeover battle for US conglomerate RJR Nabisco – the maker of Camel cigarettes and Oreo biscuits – which was the focus of a book and film.

The alert comes after a mass exodus from London’s stock market that has left the City reeling. 

Figures this week showed the biggest net loss of firms from the UK exchange since 2009, with 88 companies leaving and just 18 joining.

Firms have quit to list on rival exchanges such as New York, or have de-listed after being snapped up in takeovers.

Corporate greed: James Garner starred in the 1993 Barbarians at the Gate film about the bitter takeover batter for US conglomerate RJR Nabisco

City grandees have called on the Government to scrap stamp duty on London-listed shares.

Richard Wilson, chief executive of Interactive Investor, yesterday said the 0.5 per cent levy was the ‘elephant in the room’. ‘We are taxing the UK stock exchange out of existence,’ he said.

But 2025 is set to be tough with a ‘wave of demand approaching the shores of the UK’ from both strategic and private equity buyers, according to Peel Hunt. 

‘Our coastal defences feel weaker than ever,’ the bank warned.

Michael Nicholson, head of mergers and acquisitions at Peel Hunt, added: ‘It seems certain 2025 will bring a major and sustained flow of UK takeovers.

‘Bid defence manuals are no longer an item to be left on the shelf. They ought to be front-of-mind for all boards.’ 

Stocks on London’s junior market AIM are particularly at risk of takeovers in 2025, the report said. Up to a third of small and mid-cap AIM businesses could be snapped up.

They are vulnerable due to a lack of liquidity, depressed valuations and reduced ability to use capital markets.

The reduction of tax incentives to invest in AIM in Chancellor Rachel Reeves’ Budget ‘only serve to whip up the headwinds’ facing the sector.

In 2024, one in 20 UK-listed companies was publicly put under offer, Peel Hunt found.

Major deals include the takeover of Royal Mail owner International Distribution Services, packaging giant DS Smith’s merger with a US rival and GXO’s purchase of logistics firm Wincanton. 

But some boards defended low-ball bids. And while bidders are approaching shareholders directly, they have largely stopped short of going fully hostile.

‘Some institutions have taken it on themselves to become staunch defenders against UK plc being sold on the cheap,’ Peel Hunt said.