UK Public M and A Update Q3 2022

Overview

Thirteen firm offers were announced in Q3 2022 (compared with 16 in Q2 2022) with an aggregate offer value of approximately £20.7 billion (which represents an increase from £13.61 billion in Q2 2022). Of those 13 firm offers, 12 were solely for cash.  These figures include the competing bids from Tetra Tech and WSP Global, for RPS Group. 

In the last quarter, Ashurst's UK public M&A mandates have included advising:

• Lamprell plc on the joint offer from Blofeld Investment Management and AlGihaz;
• Nomura International on the £2 billion recommended cash offer for Mediclinic International plc comprising a consortium of Remgro and MSC Mediterranean Shipping Company;
• Barclays on the £1.3 billion recommended cash offer for Biffa plc from Energy Capital Partners; and
• finnCap on the £63.2 million recommended cash offer for Attraqt Group plc from CrownPeak Holdings, which is majority owned by K1 Investment Management.

After a summer that was dominated in the UK by a Conservative Party leadership election, further Central Bank interest rate hikes and a prolongation of the Russian invasion of Ukraine, September heralded the arrival of a new UK Government administration.  The 'honeymoon period' traditionally afforded to new administrations however, proved relatively short lived after a fiscal event in mid-September sent shockwaves through the markets, causing UK gilt yields to soar and the value of sterling to plummet significantly against the dollar.  Although attempts have subsequently been made to reassure and stabilise the markets, the ongoing macro-economic uncertainty – which has also resulted in a significant tightening in the credit markets – will likely continue to act as a dampener on UK public M&A activity for the remainder of 2022.

Although activity levels throughout the summer remained relatively robust with only a modest drop in the number of firm offer announcements relative to the prior quarter, the significant increase in aggregate deal value was driven largely by Schneider Electric's offer to acquire the remaining AVEVA Group shares that it does not already own.  It is also noteworthy that all but one of the announced bids this quarter were for cash.

From a legal and regulatory standpoint, this update includes the usual summary of the Takeover Panel's annual report (published in July as normal) as well as some commentary on recent schemes of arrangements for companies with a single or small number of nominee shareholders and the practical challenges that are faced when implementing takeovers of such companies by way of a scheme.  Further details of these and other matters are set out in the News Digest on pages 3 to 5 of the publication (which can be downloaded below).

Finally, the Ashurst public M&A team is also pleased to announce that Ashurst has been awarded Corporate Team of the Year at the Legal Business Awards 2022 for advising on last year's high profile takeover of Morrisons.