THE London Stock Market has become a car boot sale for foreign buyers looking to snatch a bargain.
British tech firm Spirent Communications is the latest company to fall prey to an overseas bidder — yesterday agreeing to a £1billion takeover by US rival Viavi Solutions.
The deal comes amid a flurry of takeover interest in UK companies with insurer Direct Line, electricals chain Currys and haulier Wincanton all approached.
It follows a deal-making drought — but bankers predict this is just the start of a feeding frenzy as punishing stock markets have wiped millions off London company valuations, making them cheap.
Foreign buyers also have more confidence about investing in the UK as data suggests the economy is already rebounding from a mild recession.
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Arizona-based Viavi made an opportunistic swoop on Spirent, which shed half of its valuation in the past year on the back of falling profits in tough markets.
However, shares in the West Sussex-based firm bounced 62 per cent yesterday to 176.10p — just above Viavi’s 175p a share offer.
The takeover marks a step-change in how foreign buyers are turning to private equity to help fund bids, rather than use their own cash resources.
Viavi is using a mix of its own cash, and a £313million loan from buyout company Silver Lake.
It allowed Viavi to table a knockout bid that is a 61 per cent premium to Spirent’s share price and not stretch its own balance sheet.
Private equity firms are awash with around £3.4trillion of unused cash — so-called dry powder — that could be used to fund even more British takeovers.
Charles Hall, from investment bank Peel Hunt, says 40 British companies exited the London market last year.
He warned: “The small and midcap sector is particularly vulnerable and if nothing is done, we will lose a core driver of economic growth and tax revenue”.
The Spirent takeover will also mean the loss of another company from London’s shrinking stock market after firms including gambling firm Flutter, building materials group CRH and travel group TUI have quit.
Spirent traces its roots back to 1936 when Jack Bowthorpe used £2,000 of family cash to set up a business that “filled the niches in the electrical and electronics market”.
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It now focuses on 5G tech used by mobile phones.
VANS LIFT IN FLEETS BOOSTER
VANS had the biggest increase in sales since 1998 last month as company fleets support the vehicle industry’s growth.
The number of vans registered grew by 2.2 per cent to 17,93.
The Society for Motor Manufacturers and Traders called it the best performance in February for more than a quarter of a century.
The car industry is back in growth after the pandemic, with total vehicle registrations rising by 14 per cent to 84,886 according to the SMMT.
Meanwhile, electric car sales fell by a fifth amid calls for the Chancellor to cut VAT on them and their charging points.
As leasing companies and firms buy cars, electric vehicle registrations hit 35,900 in two months, of which just 6,500 were by regular drivers — down from 7,900 the year before.
The SMMT said reducing VAT on electric cars from 20 per cent to 10 per cent would save the average buyer £4,000.
MONZO’S BIG VALUE
DIGITAL bank Monzo has been valued at £3.9billion after raising fresh funds.
The bank — known for its bright coral cards — now has more than nine million customers after two million more signed up last year.
It raised £340million from US investor CapitalG, which is owned by Google’s parent group Alphabet and also backs Airbnb and Duolingo.
Monzo is now planning to enter the US market.
BEING OF SERVICE
CHANCELLOR Jeremy Hunt has been given a pre-Budget boost as the services sector grew for the fourth successive month amid the fastest rise in new work for nine months.
A survey showed the increase in the sector was helped by rising business and consumer spending.
Economists said the data suggests the “economy has turned a corner” and was recovering from its mild recession.
Businesses also reported a “solid increase” in new order volumes, signalling a renewed confidence in investment.
THAT’S A BIT RICH, JEFF
AMAZON founder Jeff Bezos has managed to dethrone Elon Musk and become the richest person on Earth once again.
Mr Bezos has topped the Bloomberg Billionaires Index for the first time since 2021 with a £157billion fortune, helped by his stake in Apple soaring in value.
Meanwhile, tycoon Musk’s Tesla has sunk in value on the back of investor wariness about falling sales of electric vehicles.
Apple is now worth £1.37trillion and Mr Bezos still owns a 10 per cent stake in the firm.
He founded Amazon with his former wife Mackenzie Scott from his garage in Washington, US, in 1994 as an online book store.
TESCO PAY RISES
TESCO is spending £300million to raise staff wages to match increases by its rivals.
The UK’s biggest supermarket, which employs 330,000 people, said it would increase pay by 9.1 per cent.
Its basic hourly rate will go up from £11.02 to £12.02 while those based inside the M25 will have their pay bumped from £11.95 to £13.15.
Retailers are having to hike wages to keep staff — but the Bank of England has expressed nervousness that an upwards wage spiral could make inflation harder to kick.
