Takeovers have been a dominant force in the London market in recent years, and this trend has only continued into 2025. With 15 bids launched already this year, it is evident that the pace of takeovers is higher in the first quarter compared to the same period last year, as noted by Peel Hunt.

Investors currently have a plethora of takeover candidates to choose from, as most London listings are undervalued and susceptible to acquisition. Aberdeen’s analysis in February revealed that UK smaller companies were the most undervalued stocks globally, with a discount of -23.4% compared to global companies. This discount, although now narrowed to -14.6%, still presents an attractive opportunity for potential buyers.

Private equity firms have been particularly active in the takeover space, with deals ranging from small to large. Companies like De La Rue and Hargreaves Lansdown have recently been acquired by private equity firms, signaling a shift towards more take-privates and delistings in the market.

In addition to private equity involvement, US giants like Thoma Bravo and KKR have been targeting UK tech companies and property Reits for acquisition. This trend is not unique to London, as private acquisitions of European publicly listed companies pose a significant threat to public markets across the UK and EU.

Despite the flurry of takeover activity, new listings are expected to be scarce in the near future, as recent market volatility has caused potential issuers to delay their plans until after the summer. This lack of new listings deprives investors of the opportunity to invest in growing companies with potential for income and growth.

At a recent debate on the best environment for growing companies to thrive, it was argued that growing companies are better suited for public markets rather than private equity ownership. Research has shown that private equity returns are not superior to public indices, and private equity ownership may hinder innovation within companies.

Overall, the audience at the debate strongly favored the belief that growing companies thrive best on public markets. This sentiment is echoed in the market, where the continuous wave of takeovers and delistings raises concerns about the long-term health and innovation potential of companies under private ownership.