US PE sponsors, and their portfolio companies, have continued to execute a significant number of UK public takeovers - launching bids for UK companies listed across both the Main Market of the London Stock Exchange and AIM.
In 2023, UK public takeovers increased by 24 per cent., year-on-year, with 63 per cent. of these bids being backed by PE or other financial sponsors ("UK P2Ps").
In the first six months of 2024, interest from PE backed sponsors continued to remain strong despite a resurgence in activity by strategic acquirers – with 13 of 30 UK public bids (43 per cent.) being UK P2Ps.
PE-backed sponsors have shown a particular interest in using UK P2Ps to deploy funds across the technology, financial, logistics and real estate sectors.
UK P2Ps have the potential to offer a range of benefits, including:
- the availability of high-quality assets, which have - in recent years - been at low valuations relative to private and US-listed peers;
- the improved alignment of interests with target management, who often wish to access private capital for the purposes of M&A or other growth opportunities; and
- a relatively fast and flexible takeover regime, with bids typically occurring outside a formal sale process.
UK P2Ps are notably different processes from both private M&A deals and US takeover bids.
This briefing, that we are delighted to have produced with Cravath, Swaine & Moore LLP, is intended to provide a trans-Atlantic perspective on certain key matters which US PE sponsors should consider when contemplating a potential UK P2P.
Contributors from Cravath include David Perkins (Partner, Private Equity), Richard Hall (Partner, Corporate), Adam Sanchez (Partner, Private Equity), and Yeana Lee (Associate, Corporate).
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