UK Public M and A Update Q1 2022
14 April 2022
Overview
12 firm offers were announced in Q1 2022 (compared to 13 in Q1 2021), with a combined offer value of approximately £4 billion (representing a decrease from £10.09 billion in Q4 2021). Of those 12 offers, seven were solely for cash.
In the last quarter, Ashurst's UK public M&A mandates included:
- advising Air Partner plc on its £84.8 million recommended offer from Wheels Up Experience Inc;
- advising J.P. Morgan on the £272 million recommended offer by Workspace Group for McKay Securities Plc; and
- advising Rothschild & Co on the £965 million recommended cash and share offer by GXO Logistics, Inc. for Clipper Logistics plc.
A summary of the key features of each announced offer is set out in a table in the Appendix on pages 5-6 of this publication (which can be downloaded below).
| Announced bids | 12 |
| Recommended on announcement | 10 |
| Schemes of arrangement | 8 |
| Average of bid premia (% unweighted) | 48.69% |
| Average of bid premia (% weighted) | 73.24% |
2022 began with a reasonable degree of optimism as a result of post-Brexit and post-pandemic market confidence. This is evidenced by a number of the firm offers announced in Q1 2022 being in January. However, this optimism dissipated in subsequent weeks, notably following the ongoing Russian invasion of Ukraine, which has resulted in significant shockwaves being felt throughout the financial markets and a significantly heightened level of uncertainty for economic growth, particularly in Europe.
As a result, until late March only five firm offers had been announced in February and March of this year, and there was evidence of bidders adopting a 'wait-and-see' approach in relation to the various unannounced bid situations – or even walking away entirely, as was the case with the possible offer by Spectris for Oxford Instruments, with the Russian invasion of Ukraine explicitly cited by Spectris as a reason for not proceeding with its offer.
That said, activity picked up in the final days of March with three firm offers announced, two of which with a deal value of at least £500 million, as well as a possible competing proposal for McKay Securities Plc.
From a regulatory perspective, Q1 has seen some important developments. This includes the publication of public consultation paper 2022/1 ("PCP 2022/1") and a revision to Practice Statement No. 20.
Further details of these developments are set out in the News digest on page 2 of this publication (which can be downloaded below).
