Takeovers of British companies reached a 14-year high by value in the first seven months of 2021 according to data from Refinitiv and the action shows little sign of letting up in 2022.

The total value of deals during this aforementioned period was $198 billion, a more than three-fold increase on the same period in the previous year.

Two more firms, retail logistics specialist Clipper Logistics (CLG) and British aviation services company John Menzies (MNZS), are now set to disappear from the London Stock Exchange.

Both firms are in the process of being acquired by foreign trade buyers. This marks a change from last year, when private equity dominated the takeover of UK plc. However the rationale for overseas entities to acquire domestic firms remains the same.

From a valuation perspective London-listed companies appear undervalued compared with international rivals. 

Clipper Logistics has agreed a takeover deal with GXO, a New York based rival at 920p a share. This values Clipper at approximately £947 million.

GXO was part of another American warehouse and tracking company XPO Logistics, until August 2021, when it was spun out and listed separately.

John Menzies, the British aviation services company has agreed a £550 million takeover deal with a Kuwaiti rival, National Aviation Services.

Two initial unsolicited approached at 460p and 510p were dismissed by management as being ‘highly opportunistic’. However on 21 February the board recommended a new 608p offer, valuing the company at £550 million.

The table outlines the FTSE 250 companies (easier to swallow than their FTSE 100 counterparts as acquisition targets) which appear potentially attractive on the following metrics (often employed by private equity buyers in particular): enterprise value to free cash flow; enterprise value to earnings before interest, tax, depreciation; and amortisation and net debt to assets.

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