UK public company takeovers in 2025 and beyond
This article is an extract from the CMS European M&A Outlook 2026. To download the full report please click here
The UK public M&A market has roared back to life in 2025, with activity levels not seen since the pre-pandemic era. With more than GBP 22 billion in firm offers launched in the first half of the year, the market averaged seven firm offers per month, with 12 in June alone. This extraordinary pace is being driven by undervalued midcap shares, increased foreign interest and a more pragmatic regulatory environment, fuelling a wave of acquisitions.
Valuation gaps are putting the spurs to dealmaking. Many UK-listed companies’shares continue to trade at discounts to intrinsic value, creating fertile ground for opportunistic bids. By way of example, discounts to NAV per share for some listed real asset companies have been as wide as 40%.
Private equity bidders remain active, drawn by attractive pricing and management teams open to proposals for life away from the public markets. As cash offers are made at historically low valuations, listed strategic bidders – who can offer their own equity to target shareholders as an alternative to a pure cash exit from a private equity bidder – are providing competitive tension to takeover processes, showing that private equity cash is not always king.
In addition, listed strategics are benefiting from regulatory tailwinds, with reforms to the UK Listing Rules and Prospectus Regulation Rules making it significantly easier to transact and compete for attractive targets.
Emerging deal dynamics
Across the takeover space, the use of bidder shares as consideration is increasing, with 26% of firm offers in 2025 involving listed-paper consideration. This trend is satisfying institutional investors’ desire to support ‘UK PLC’, roll their investments and capture the upside in future synergies.
As far as key sectors are concerned, real estate, along with TMT and financials, are drawing the most attention. These industries offer a combination of undervaluation, strategic fit and growth potential that is proving compelling to both financial and strategic bidders.
Of late, dealmakers have focused their efforts on UK mid-cap targets – nearly 74% of firm offers in H1 2025 were for companies valued under GBP 500 million. Low share liquidity, limited analyst coverage and undervaluation are driving the focus on this segment of the market.
The dynamics around early-stage announcements are also evolving. A significant number of offer periods now begin with a possible offer announcement (or leak), evidencing a more strategic approach to engagement. Given the paramount importance of confidentiality, this development has not escaped the attention of the Financial Conduct Authority (FCA), which is investigating this trend.
Cross-border interest in UK-listed companies has been another defining feature of the 2025 public M&A landscape, with foreign bidders accounting for more than 53% of firm offers announced in H1. North American bidders remain the most active – dealmakers from the US contributed 31% of foreign firm offers in H1, and their Canadian counterparts 9% – with strategic and financial acquirers targeting UK assets for scale and innovation. European bidders, while fewer in number (accounting for 9% of foreign firm offers), have focused on mid-cap targets with strategic alignment.
Regulatory reforms reshaping the landscape
Regulatory developments are also reshaping the transaction landscape, most notably for listed strategics. The threshold for requiring a prospectus for secondary issuances contained in the Prospectus Regulation Rules will soon be raised from 20% to 75% of existing securities admitted to trading (and up to 100% for closed-ended investment companies). This change – effective 19 January 2026 – allows bidders who structure their offer as a scheme of arrangement to issue equity for acquisitions without a full prospectus if the issuance remains under the specified threshold.
Moreover, the most recent reforms to the UK Listing Rules – effective 29 July 2024 – abolished the requirement for shareholder approval of Class 1 transactions, which were previously triggered when a listed company undertook a deal representing 25% or more of its size under the FCA’s class tests. This amendment allows bidders to pursue significant and transformational opportunities without needing to seek shareholder approval in a general meeting (save where a transaction would constitute a reverse takeover).
These changes mean that, in addition to reducing regulatory friction, listed strategics can execute larger deals faster, incur less costs and compete better with private equity-backed bidders.
What comes next?
Looking to the future, we expect the UK public M&A market to remain active – but the nature of dealmaking is evolving. Several key themes will shape the next phase of activity.
The strong focus on sub-GBP 500 million targets is likely to persist. These companies remain attractively priced, often under-researched and more agile (and willing) in responding to bidder approaches. Boards of mid-cap PLCs should be prepared for unsolicited interest and ensure their defence strategies are up to date. Inbound interest, particularly from North America, will also remain strong. The Competition and Markets Authority’s move towards more proportionate, predictable and faster merger reviews is making the UK an increasingly attractive jurisdiction for cross-border public M&A.
As bidder confidence grows and valuations remain compressed, the market is likely to see more contested takeovers. Listed strategics are less likely to sit on the sidelines. Target boards should anticipate the possibility of multiple bidders or activist involvement, especially in sectors with strategic assets or underperforming governance.
Prospective bidders, for their part, should familiarise themselves with the regulatory landscape in which UK takeovers play out to ensure they can seize compelling opportunities swiftly when they arise. While the regulatory reforms mentioned above are streamlining some aspects of the UK regime, the broader regulatory landscape remains complex. Boards and advisers will need to navigate evolving disclosure obligations, foreign investment screening and shareholder activism with greater precision and speed.
With competition intensifying, bidders will continue to prioritise clean and de-risked execution. Expect to see more pre-bid stake building, an even greater focus on irrevocable undertakings to support bids and early engagement with key shareholders (often ahead of the target board being approached). For targets, this means being ready to respond quickly and credibly to approaches.
