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UK’s public-to-private deal boom mirrors global trend

Author: ICAEW Insights

Published: 27 Sep 2021

A global boom in the number of deals where private equity-backed consortia and managers make takeover bids for listed companies reflects a buoyant M&A market and does not point to a malaise in the UK’s capital markets, ICAEW’s head of corporate finance says.

At time of writing, there have been 123 public-to-private transactions across the globe in the first seven months of 2021, worth a combined total of $194bn. Of those, 16 of these were in the UK with a value of $46bn, including the ongoing $7bn bid by CD&R for supermarket chain Morrisons and KKR’s £2bn takeover of John Laing Group.

David Petrie, ICAEW’s Head of Corporate Finance, said despite the high-profile nature of some of the deals, the level of public-to-private transactions was by no means out of step with the current high levels of global investment, M&A and private equity: “It certainly doesn’t point to a crisis in the efficiency of the UK’s capital markets. It’s simply a feature of a global trend,” Petrie said. 

Petrie said the prevalence of public-to-private deals illustrated that the evolution of organisations wasn’t necessarily a linear process: “As companies grow and change, the most appropriate form of equity to support that growth may come from capital markets but it may also come from private equity. To regard the evolution of a company as simply going from start-up via business angel funding through the VC, private equity and then a listing is now an outdated concept.”

However, Petrie said public-to-private deals presented different technical challenges to those working in corporate finance and specific regulatory requirements including recent changes to the Takeover Code. For that reason, ICAEW has updated its technical guidance on Public-to-Private transactions, due to be published imminently. “The Corporate Finance Faculty always seeks to be ahead of the trend and to provide its members with the most up to date information on how to get things done and this is the latest in our series,” Petrie said.

To mark the publication of the Corporate Finance Faculty’s new best-practice guideline Public to Private Transactions, Ian Hart, Director General of the Takeover Panel, will next week participate in an online seminar hosted by ICAEW, PwC and law firm Travers Smith to analyse some of the trends in the Public-to-Private transactions market, to draw conclusions about the key success factors in a PTP transaction and highlight any regulatory issues that advisors and investors should be aware of in the context of PTP deals that involve London-listed companies.

Register for ICAEW’s online seminar on Public-to-Private Transactions, taking place 10-11am on Wednesday 29 September 

Public-to-Private Transactions, the updated technical guidance on public-private deals from ICAEW, will be made available to ICAEW Corporate Finance members free of charge with the October issue of Corporate Financier. To join the faculty or to find out more go to www.icaew.com/cff or contact the Faculty by email.

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