Another day, another takeover bid for a UK-listed company. On Thursday alone, three firms—Rotork, Gooch & Housego, and Ramsdens—accepted bids totalling billions. While shareholders enjoy premiums of up to 73%, the collective effect is a hollowing-out of London's stock market.
A report by Peel Hunt, titled Selling the Family Silver, highlights the imbalance: since 2023, £285bn of market capitalisation has left London via takeovers and relocations, while only £6bn has arrived through new listings of companies worth over £100m. The UK market is underpriced, boards are pressured to sell, and liquidity flows to the US, which accounts for 70% of global stock market value.
Despite consultations and rule changes—such as allowing founders to retain enhanced voting rights—the decline continues. Critics argue that Chancellor Rachel Reeves's Mansion House reforms focused on infrastructure and private assets, neglecting public markets. Proposals include raising the UK weighting in default pension schemes, removing stamp duty on share trading, and offering tax reliefs for entrepreneurs listing in London.
Former Bank of England chief economist Andy Haldane, now president of the British Chambers of Commerce, advocates restoring a home bias in pension investment, noting that pre-1997 tax credits favoured UK stocks. He insists that “correcting the absence of home bias” is key to reviving the market.
The next chancellor must recognise that the current trajectory is unhealthy. Without bold action, London risks becoming a mere takeover target rather than a vibrant capital market for wealth-creating companies.
