Three Major UK Firms Receive Foreign Takeover Bids, Prompting London Stock Exchange De-Listings

UK firms face foreign takeovers, as Royal Mail, Hipgnosis, and DS Smith receive acquisition bids, signaling challenges for London's stock market.

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Three Major UK Firms Receive Foreign Takeover Bids, Prompting London Stock Exchange De-Listings

Three Major UK Firms Receive Foreign Takeover Bids, Prompting London Stock Exchange De-Listings

Three high-profile UK companies - Royal Mail, Hipgnosis, and DS Smith - have received takeover bids from foreign competitors this week, leading to their de-listings from the London Stock Exchange. The flurry of acquisition activity has dealt a blow to the UK's premium stock market.

Hipgnosis Songs Fund, a music rights owner with a catalog including Justin Bieber, Shakira, and Neil Young, accepted a $1.4 billion takeover offer from US rival Concord. The offer represented a 32% premium on Hipgnosis' previous closing share price. Hipgnosis has faced concerns over asset valuations and recently slashed the value of its song catalog by over 25%. The takeover bid marks a potential 'final chapter' for Hipgnosis as a listed entity, after a period of 'great disappointment' and 'questionable corporate governance.'

In the packaging sector, DS Smith agreed to a £5.8 billion takeover by US competitor International Paper. Mondi, a London-listed French group, initially made a £5.1 billion offer for DS Smith in March but later walked away from the deal, clearing the way for International Paper to proceed with its acquisition. DS Smith's board has recommended the counter-bid, stating that it presents an "attractive opportunity to create a truly international sustainable packaging solutions leader."

Royal Mail's minority shareholder Daniel Křetínský made a bid to purchase the remaining 72% of the company. Křetínský had previously stated in an interview with The Sunday Times that he had no intention of launching a takeover bid for Royal Mail, highlighting the dynamic nature of the UK's corporate landscape and the potential for unexpected takeover bids from foreign competitors.

Why this matters: The takeovers of these UK firms by foreign companies underscore the ongoing challenges facing the UK capital markets and the potential impact on domestic legal advisers whose clients are being acquired by US businesses. The de-listings also raise concerns about the attractiveness and competitiveness of the London Stock Exchange in retaining major UK companies.

The spate of foreign takeovers has drawn attention to the vulnerability of UK firms to international acquisition. As one of the companies involved in the takeover activity, Hipgnosis Songs Fund saw its shares surge 24.2% on news of the Concord offer, with the board encouraging shareholders to <a href="https://finance.yahoo.com/news/form-8-3-hip

Key Takeaways

  • 3 UK firms - Royal Mail, Hipgnosis, DS Smith - received takeover bids from foreign rivals.
  • Hipgnosis accepted $1.4B offer from US rival Concord, a 32% premium on previous share price.
  • DS Smith agreed to £5.8B takeover by US competitor International Paper, outbidding Mondi.
  • Royal Mail's minority shareholder made bid to purchase remaining 72% of the company.
  • Takeovers underscore challenges facing UK capital markets, potential impact on domestic legal advisers.