Investors to buy ‘bargain’ British firms after dearth of deals in 2022

The number of big takeovers and mergers involving UK-listed companies nearly halved this year as investors were deterred by market volatility, political instability and recession fears.

But the tide is set to turn in 2023, with buyers eyeing up quality British companies trading at ‘bargain prices’, experts said.

There were 49 bids for London-listed firms this year, including 13 abandoned after a potential offer was put on the table, according to analysis from investment platform AJ Bell. In 2021, there were a total of 82 bids, of which 16 were abandoned.

Grim growth prospects for the UK are likely to have deterred potential buyers from investing in British businesses this year, investment experts said. 

Others suggested political instability could have played a part, with Britain seeing three prime ministers and four chancellors in the space of four months.

Russ Mould, investment director at AJ Bell, said: ‘Some may point the finger at the political situation in the UK, and potentially buyers may have been waiting for greater clarity on issues such as corporation tax, windfall taxes and other policies before deciding whether to take the plunge or not.’

Earlier this month, City broker Peel Hunt said its half-year profits had crashed to just £100,000 after reporting a ‘multi-decade low for equity capital markets activity’, indicating a dearth of deals and flotations on the London Stock Exchange.