Bargain Britain – How the UK became a hunting ground for Private Equity

The UK has emerged as a prime acquisition hunting ground for private equity firms and foreign strategic buyers, driven by a persistent valuation discount relative to US equities and ample capital availability among overseas bidders. Research from Peel Hunt covering the first half of 2025 documented 15 London Stock Exchange-listed companies worth over £100m that faced acquisition bids, with overseas bidders accounting for 47% of all offers and representing nearly £9bn in combined bid value. Critically, during the same period, not a single UK-listed company exceeding £100m market capitalization completed an initial public offering, underscoring a structural reversal in London's role as a capital markets venue.

The valuation discount underpinning this acquisition wave is substantial and persistent. UK equities on the FTSE All-Share currently trade at approximately 9 times expected company earnings, representing a sharp compression from the 13 to 16 times multiple that prevailed between 2015 and 2020. This gap has created an arbitrage opportunity for US private equity firms and foreign strategic acquirers flush with capital, who view British companies as inexpensive entry points into established markets or as standalone investment targets. As Dan Coatsworth, investment analyst at AJ Bell, noted, foreign acquirers are attracted to UK stocks "because they're cheap and for trade buyers they can offer an inexpensive route into a new geography."

Recent transaction activity confirms accelerating deal momentum. In early June 2025, the London Stock Exchange experienced what market participants described as a "bruising week," with KKR returning with a final bid for GP Landlord Assura following a near-year-long bidding war with Primary Health Properties, while Canadian consultancy WSP completed a £281m acquisition of engineering firm Ricardo. These transactions followed a devastating start to the week marked by three US tech takeovers totaling over £6.3bn. The cumulative effect has prompted regulatory attention: Nikhil Rathi, chief executive of the Financial Conduct Authority, told the Treasury Committee that a "range of issues" are weighing on the British market, specifically highlighting "the question around how attractive UK companies have become, particularly to US buyers." Rathi notably clarified that UK listing rules themselves are not the primary driver of IPO decline, suggesting instead that valuation arbitrage and capital availability among foreign buyers are the dominant factors reshaping the London market.