Aston Martin, Cineworld and The Restaurant Group have become vulnerable to takeover bids during the latest lockdown, City sources have warned.
Bankers said some companies were taking on lots of debt and could struggle without income for weeks or months, making them easy targets for private equity vultures.
‘Aston Martin is not in great shape,’ a top banker said. ‘It is one step before rescue category and it’s a bit of a trophy for a buyer. Hospitality firms are also in the danger zone.’
Vulnerable: Bankers said some companies were taking on lots of debt and could struggle without income for weeks or months, making them easy targets for private equity vultures
Other companies could be forced to tap shareholders again for cash.
Sam Smith, chief executive of FinnCap, an investment bank and broker, said: ‘All the companies severely impacted by Lockdown One will probably need to do further raises at some point but they’re already indebted.
‘Those businesses that were very impacted – hospitality, retail, travel – are obviously going to be impacted further.’
Firms have raised more than £27billion on the stock market since the first lockdown, according to investment bank Peel Hunt. Its chief executive, Steven Fine, said board room concerns over debt levels ‘may well result in an increase in the need for equity over the next few years.
‘It feels like the merger and acquisition cycle is about to take off quite sharply. Private equity is chock-full of cash.’
UK insurance giant RSA last week received a £7.2billion takeover bid from Canadian property insurer Intact Financial and Danish insurer Tryg.
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