Activists are giving British M&A targets a helpful shove

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Whenever a company attracts a takeover or an activist, it’s a backhanded compliment. The implication is that it is either undervalued or not being run well, and often both. British bosses are getting more of this uninvited attention. 

Merger proposals targeting UK groups are already at an eight-year peak in 2026, according to Dealogic. EasyJet, Schroders, Tate & Lyle, Segro and Intertek are among the trophies picked up by foreign buyers. But activism is rising too: the UK was the number-three destination for cage-rattling investment firms in the first half of the year, after the US and Japan, say Barclays analysts. UK companies in total accounted for two-fifths of Europe’s activist campaigns, according to Alvarez & Marsal. 

Are cut-price stocks the main draw? The FTSE 100 trades at just 13 times forecast earnings compared with 22 times for its transatlantic counterpart, the S&P 500. Compare the UK instead with the equal-weighted S&P 500 to reduce the dominance of huge tech companies such as Apple and Nvidia, and the UK discount is in line with its average over the past two decades. Even among mid-caps — a sweet spot for buyers and activists alike — the FTSE 250’s discount to the US Russell 2000 is only slightly below its typical gap. 

But where activists can potentially create value is by encouraging companies to cut along obvious dotted lines, or sell themselves at a premium to rivals that believe they can cut costs. That seems to be a growing part of the activist playbook. Calls for companies to put themselves on the block, in whole or in part, have made up a fifth of all activist demands across Europe this year, A&M reckons, compared with 8 per cent in 2025.

Sometimes, the call is loud. Think of Saba, the investment firm of hedge fund manager Boaz Weinstein, whose campaigns against undervalued UK investment trusts have toppled several boards. Others have done their agitating behind closed doors. Before UK logistics trust Segro was approached by US peer Prologis — it accepted a £14bn offer this month — activist Lauro Asset Management had suggested it at least spin off its data centre unit. FTSE 100 testing company Intertek too, was encouraged by activists to rethink its future before private equity firm EQT swooped.

A&M looked at more than 400 companies across Europe with a known activist holding of at least 1 per cent, but where no public campaign had launched. It found that over two years, these undertook almost a third more disposals than the wider corporate population, and also a fifth fewer acquisitions. Behind the wave of UK M&A is a wave of activist deal instigators, whether they’re visible or not.

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