Takeover 2026!
One of the predictions I made recently for 2026 was that I expected the rapid pace of takeovers in the UK market to continue. There is no doubt that takeovers and consolidations have been shrinking the number of UK-listed stocks at quite a pace over the last few years (although delistings also play a part in this):
[Chart: Statista]
Many stocks on the UK market seem cheap at the moment. Almost continuous outflows from UK Equity Funds mean that institutions have been net sellers, whatever they think of the valuation or outlook for their holdings. In these times, even surprise good news gets sold into:
[Chart: Calastone]
It would be naïve to think that these outflows will suddenly reverse because we are into a new year, so identifying catalysts for re-valuation may be one of the keys to strong returns in 2026. Finding the type of companies that may be more likely to receive takeover offers is one way to accelerate price discovery. This is the task that Alex and I have set ourselves.
Obtaining a list of takeover offers over time is actually quite challenging....