Bargain Britain – how the UK became a hunting ground for private equity and multinationals
Susannah Streeter, chief investment strategist, Wealth Club: “Suitors are coming thick and fast, attempting to woo over shareholders in British firms. While some have been rebuffed this week, such as the takeover bids for Sergo from Prologis and easyJet from Castlelake, the direction of travel is clear. British markets are increasingly becoming a hunting ground for sophisticated institutional investors, with UK-listed stocks continuing to trade at lower valuations than other markets.
The latest successful target is Intertek, a laboratory equipment tester whose share price has lagged US peers, drawing the attention of Swedish private equity firm EQT. After a series of escalating bids, reaching a 60% premium to the pre-bid share price, the £10.6 billion acquisition looks set to be accepted by shareholders. It’s the third FTSE 100 company set to be acquired by an international investor this year and is reportedly the 22nd buyout or delisting from the wider UK market. This month also saw a £2.7bn offer for the 150-year-old sugar refiner Tate & Lyle, whose stock jumped 45% on receipt of the offer from an American rival.
With the pound falling back as the dollar strengthens and UK assets feeling the effects of uncertainty on the UK political scene, British firms will stay sought after. The stampede to take over slices of the UK market, at an attractive price, isn’t likely to slow any time soon.
In addition to the wave of take-private transactions financed by global private equity, we are witnessing a flow of delistings and relistings.
Companies are choosing to abandon the London Stock Exchange in record numbers. In 2024 alone, the LSE experienced its largest outflow since the global financial crisis, with 88 companies choosing to delist or transfer their primary listing away from London. Another 50 delisted in 2025. The primary reasons cited when leaving the market included lower company valuations, declining market liquidity, and the administrative burden of remaining listed.
These factors have been exacerbated by domestic pension funds that drastically reduced their allocation to UK equities over the last 25 years, from 50% to 4% in search of increased returns and greater diversification.
Bargain Britain?
Despite financial headlines heralding a triumphant return to form, as the FTSE 100 reached a new high of 10,000 at the start of 2026, a swallow doesn’t make a summer.
Driven by gains in the technology sector, notably underrepresented on the UK market, a valuation chasm may have opened between the UK and its global peers, most notably the United States.
US stocks are typically more expensive than UK ones
The US market has entered elevated territory, trading at a price-to-earnings ratio of nearly 22, following a steady increase over the last decade.
In contrast, the UK market trades at a ratio of around 13, declining over the last 10 years, and making the US notably more expensive on this metric.
This has provided an opportunity for deep-pocketed global investors, targeting profitable, internationally competitive companies languishing at what they see as bargain multiples relative to global equivalents.
Private equity firm CVC Capital Partners led a consortium to acquire financial services provider Hargreaves Lansdown for £5.4bn. Similarly, Canadian private equity firm Brookfield Asset Management completed a number of UK-listed takeovers, including digital payments provider Network International and distribution centre investment company Tritax Eurobox, both previous FTSE 250 constituents.
If you can’t beat them, join them?
As a result of these trends, many investors in British equity markets have found themselves on the outside looking in, as former index constituents and exciting would-be entrants operate in the private markets.
But there are still opportunities ahead. Investors can still capture the true value of the UK economy by following the lead of global private equity and getting some exposure to private markets.
Until fairly recently, this would have been difficult, as Private Equity investments were most commonly associated with highly illiquid, closed-ended vehicles with long capital lock-up periods and significant minimum investment requirements, often around £5-10m. However, the emergence of Semi-Liquid Funds has opened private markets to eligible private investors by providing a more liquid vehicle with far lower investment minimums and which allows subscriptions and redemptions on a rolling basis (although these can be subject to restrictions).
But it’s important to understand that while the opportunities in private markets could be compelling, they still carry distinct and elevated risks. These investments could take many years to generate a return, if at all, and should be approached as long-term commitments. Additionally, they are high-risk investments and vulnerable to heightened levels of pricing uncertainty compared to publicly traded alternatives. So, you should not invest money you cannot afford to lose.”
Bargain Britain?
Source: Morningstar. The chart shows the rolling price to earnings ratio for the US and UK stock markets as measured by the iShares Core S&P 500 ETF and SPDR FTSE All Share ETF, for the period 30/04/2016 to 30/04/2026.