Two more firms are set to depart from the London stock market in the wake of takeover bids, underscoring Britain’s emergence as the foremost destination for dealmaking in Europe this year. Spectris, a FTSE 250 scientific testing kit manufacturer, accepted a £4.4 billion bid from the US private equity giant Advent International, marking the largest UK takeover in 2025. Despite Advent’s ascendancy, private equity heavyweight KKR is contemplating a rival bid, setting the stage for a possible bidding war.

Spectris’s shares jumped nearly 16%, with the price now up 86% since the company was first identified as a takeover target earlier in June. Advent’s offer of £37.63 per share includes a 28p interim dividend, representing an 85% premium on the price before takeover speculation began. Spectris, which supplies precision instrument technology to sectors such as pharmaceuticals and semiconductors, reported a recent sales decline reflecting market weaknesses. Nevertheless, Advent’s managing partner called the deal a “vote of confidence in British engineering and innovation.” The Spectris chairman expressed the board’s belief that the offer reflects the company’s value and benefits its stakeholders.

KKR, however, despite losing out to Primary Health Properties in its £1.8 billion bid for GP surgery owner Assura, has not stepped away from the fray for Spectris. The firm is reported to be in advanced due diligence stages and arranging financing for its possible bid, though its second bid for Spectris was rejected, with the company favoring Advent’s offer. According to UK takeover rules, KKR has until early July to formalize a competing bid or withdraw. Market commentators note that KKR will need to act swiftly to avoid losing two deals in quick succession.

This flurry of dealmaking is part of a broader trend that has seen UK firms increasingly targeted by overseas private equity and strategic buyers due to relatively low valuations on the London market. A report by law firm White & Case revealed a 52% increase in UK-related deals this year compared to last, with 1,207 transactions valued at nearly £89 billion so far. High-profile recent deals include DoorDash’s $2.9 billion acquisition of Deliveroo, Qualcomm’s £1.8 billion takeover of microchip designer Alphawave, and food manufacturer Greencore’s purchase of Bakkavor for £1.2 billion.

The mounting wave of delistings and take-private transactions has heightened concerns about London’s shrinking public equity market. Observers warn that if investors continue to overlook the value presented by UK-listed companies, the market will remain vulnerable to these takeover bids. Investment director Russ Mould commented that the multiple bid battles highlight how the UK market is increasingly “on sale” to trade buyers and private equity firms. Financial expert Susannah Streeter lamented that Spectris, a prime example of British engineering excellence with global reach, will likely forgo future growth as a listed entity, now under American ownership with deeper pockets.

Chancellor Rachel Reeves faces intensifying calls to revive London’s equity market, seen as pivotal for broader economic vitality. The UK is grappling with an ongoing trend of primary listings shifting to New York, as evidenced by companies like Wise and Flutter seeking US markets. IPO activity remains muted, despite occasional bright spots such as Circle’s recent IPO surge in the US, which reignited debate on the efficiency of the public offering system.

Spectris’s takeover illustrates that while geopolitical tensions and economic uncertainties persist, dealmaking activity—particularly involving private equity—remains robust. Advent’s prior acquisition of British defence group Cobham drew criticism after the company’s operations were disassembled and sold abroad, raising questions about the long-term impact of such takeovers on UK manufacturing.

In conclusion, the advent of the Advent-Spectris deal, potentially accompanied by rival bids, is emblematic of the high-stakes environment currently shaping the UK equity landscape. With significant deals continuing to surface, the pressure mounts on policymakers and investors alike to ensure London remains a competitive and attractive hub for public market investment.

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Source: Noah Wire Services