Legal development

UK Public Update Q2

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     Overview 

    16 firm offers were announced in Q2 2022 (compared to 12 in Q1 2022), with a combined offer value of approximately £13.61 billion (representing an increase from £4 billion in Q1 2022). Of those 16 offers, seven were solely for cash.

    • In the last quarter, Ashurst's UK public M&A mandates included:
    • advising Next Fifteen Communications Group Plc in relation to its £310 million recommended cash and share offer for M&C Saatchi Plc;
    • advising Amalfi Bidco Limited (a vehicle controlled by the founders of CareTech) in relation to its £870.3m recommended cash and share offer for CareTech Holdings PLC;
    • advising J.P. Morgan Cazenove on the £1.75 billion recommended cash offer from KKR for CountourGlobal plc; and
      advising Deutsche Bank on the £4 billion recommended cash offer by Brookfield Infrastructure Partners L.P. for HomeServe plc.

      A summary of the key features of each announced offer is set out in a table in the Appendix of this publication (which can be downloaded below).

      Announced Bids  16
       Recommended on announcement  11
       Schemes of arrangement 13
       Average of bid premia (%unweighted) 42.66% 
       Average of bid premia (%weighted) 16.63%

    The economic uncertainty created by the Russian invasion of Ukraine and rising inflation, the latter of which has resulted in interest rate hikes by central banks in the UK and abroad, are expected to have a dampening effect on UK public M&A activity in the remainder of 2022 relative to the record levels set in 2021. However, the significant amount of private capital available to be deployed will likely increase the M&A market's resilience to the impact of rising inflation and increased interest rates. This has been evidenced by the steady growth of firm offers in Q2 2022 relative to the prior quarter, with the 16 firm offers announced in Q2 2022 also representing a return to near pre-pandemic levels of activity (there having been 19 firm offers announced in Q2 2019 against only five firm offers in Q2 2020 at the onset of the COVID-19 pandemic).

    Q2 2022 also saw a significant increase in deal value relative to the prior quarter. Out of the sixteen firm offers in Q2, nine have deal values of over £500 million and of those nine, six have deal values of over £1 billion. It is also noteworthy that three of the six £1 billion plus firm offers were take-privates, including Brookfield's £4 billion offer for HomeServe.

    From a regulatory perspective, Q2 2022 has seen some important developments. This includes the publication of the Panel's Response Statement to PCP 2021/1 following which a revised version of the Takeover Code was published on 13 June 2022,  as well as the publication of PCP 2022/2, which proposes certain amendments the presumed concert parties within the definition of "acting in concert".

    Further details of these developments are set out in the New digest on page 3 and 4 of this publication (which can be downloaded below). 

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.