Arevised approach for FTSE 250 healthcare facilities owner Assura (AGR) by US buyout fund KKR (KKR:NYSE) and Stonepeak Partners brings UK M&A deal values so far this year to around £3.6 billion by our calculation.
That is only around 25% of the value of deals announced in the first quarter of last year, although in fairness we haven’t included Sidara’s reported interest in energy services firm Wood Group (WG.) as no financial details have been released yet.
Higher-for-longer interest rates may be deterring some trade buyers, but the amount of ‘dry powder’ in the private equity industry is still colossal and UK companies are still relatively cheap so the odds must favour a pick-up in deal activity this year.
On a positive note, the average premium so far this year is 50%, slightly higher than the 47% average last year, but the biggest deal to date in 2025 – the proposed takeover of Assura – is worth less than one third of last year’s biggest deal, the acquisition of DS Smith by International Paper (IP:NYSE).
In the investment trust world, aside from Assura and high-yielding BBGI Global Infrastructure, which is the subject of a £1.06 billion bid from Canadian pension investor BCI, most of the corporate activity has been in the form of mergers rather than acquisitions.
The combination late last year of two of the largest trusts, Alliance Trust and Witan, to form £4.8 billion market-cap behemoth Alliance Witan (ALW), sent an unmistakable message that bigger is better when it comes to courting investors.
That message was reinforced last month when JPMorgan Global Growth & Income (JGGI) – which has already absorbed Scottish Investment Trust, JPMorgan Elect and JPMorgan Multi-Asset Growth in the last few years – revealed it was in talks to take over rival Henderson International Income Trust (HINT) to create a vehicle with £3.4 billion of assets.
Yet, as KKR and BCI have shown, trusts are just like any other company, and if the price is right there is a take-private deal to be done.
It’s worth noting KKR’s offer is equal to Assura’s September 2024 EPRA NAV (net asset value) while BCI’s offer for BGGI Infrastructure (BGGI) is at a small premium to its last NAV – that seems like a clear sign to potential bidders as to what level to pitch an approach at if they want a positive reception.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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