True grit is a missing quality when it comes to flaccid directors of UK companies faced with overseas or public-to-private takeovers.
Fighting the good fight is not made any easier by UK long investors who have evacuated equity investment in London, leaving the field open to American asset managers and an assortment of activists, hedge funds, private equity ghouls and get-rich-quick merchants.
It is enormously encouraging that Jonathan Milner, founder and 6.1 per cent shareholder in Cambridge-based life sciences pioneer Abcam, is taking to the barricades and building a head of steam against the £4.5billion takeover by US behemoth Danaher.
It is unhelpful that current management, headed by Alan Hirzel, ran up the white flag so easily, and was responsible for switching Abcam’s share listing from Aim (where it had been nestled since 2005) to Nasdaq in 2020. It dropped the UK quote last year.
New York is not proving the money spinner for UK firms, as is demonstrated by the vast discount in Abcam’s shares before the firm put itself up for sale. My concern is that eventually science and skilled UK-trained researchers will be sucked overseas.
Shake on it: True grit is a missing quality when it comes to flaccid directors of UK companies faced with overseas or public-to-private takeovers
The UK is brilliant at science and technology, which is why the EU wanted Britain back in Horizon and why the latest Times Higher Education league table has three British campuses in the world’s top ten.
Oxford is top, Cambridge fifth and Imperial College eighth. No European universities make the top ten.
UK broker Peel Hunt has been engaged to fight the Danaher deal for Abcam, and has written to shareholders urging a vote against the deal. As founder, Milner wants to displace Hirzel as boss and return to the fray.
Milner cannot ask the UK’s deal referee, the Takeover Panel, to set the rules. It has no jurisdiction because the London listing has gone. As a vital UK cancer-fighting bio-tech firm is at stake, Business Secretary Kemi Badenoch has a powerful case to invoke the National Security and Investment Act. Much is made of the premium offered in bids of this kind.
Evaluated against a shrunken share price, the 40 per cent Danaher premium becomes meaningless. The current London discount has made the FTSE and its exiles too happy a hunting ground for predators.
Aussie vampire Macquarie is back on the prowl. It has been told to get lost by waste management group Renewi after making a hostile £636m cash offer for the firm.
It is going over the board’s head by seeking shareholder support. Macquarie has a contentious record in the UK and Renewi’s board is right to resist.
Regulators on both sides of the Atlantic are currently agitated by exaggerated private market valuations in a world where higher borrowing costs are a new reality, greatly changing financing models.
The public-to-private bandwagon, with pitfalls for disclosure and tax avoidance, must be firmly resisted.
Leader board
On the subject of league tables, it is worth noting that in spite of dire warnings about the threat to the City from Brexit, it remains as firmly entrenched as ever as a financial centre. The Global Financial Centres index shows that, in spite of losing a handful of listings to Wall Street, London is in second place only to New York, and gaining ground.
Nearest European competitor Geneva is in tenth place and will not be helped by the Credit Suisse debacle.
In spite of posturing by president Emmanuel Macron, Paris is stuck in 15th place behind Frankfurt. A senior US banker recently let it be known that he enjoyed stylish French entertainment, but the operation it had set up in Paris was simply a skinny duplicate in case things became rough post-Brexit.
Amid the turmoil in China, the UK’s largest bank HSBC, veteran of the 19th century ‘Opium Wars’ and much else, is doubling down, buying Citigroup’s consumer wealth operations in the People’s Republic with £2.5billion of assets. Politically dodgy maybe, but displays brave long-term thinking.
Gas threat
There is no quenching of Saudi supreme leader Mohammed bin Salman’s vaunting ambition. Not content with squeezing the pips of Western oil consumers, the quoted state controlled oil colossus Aramco has acquired a strategic stake in US natural gas extractor MidOcean Energy for $500m.
A small but critical step in what is a drive to become a leading Liquefied Natural Gas (LNG) player. Beware.
