Takeovers leave UK stock market facing ‘death by a thousand cuts’

The London stock market is facing ‘death by a thousand cuts’ as two more FTSE 250 firms bow to foreign takeovers.

In another frenzied day of deal making in the Square Mile, construction business Tyman and music group Hipgnosis backed proposals that would see them bought and removed from the UK market.

It follows a string of takeovers already this year with packaging group DS Smith, telecoms testing company Spirent Communications and haulage firm Wincanton among those falling to overseas bidders.

Insurer Direct Line and High Street electrical retailer Currys have also been approached but have so far managed to fend of takeover interest.

And bootmaker Dr Martens shares surged 7.1 per cent, or 4.8p, to 72.1p yesterday after The Mail on Sunday revealed it is being circled by some of the world’s leading fashion companies.

Shares in Hipgnosis, which owns the rights to back catalogues ranging from Blondie (pictured) to Neil Young, rose 11.6%, or 10.7p, to 102.6p

Tyman, which makes handles and seals for doors and windows and helped revamp Grand Central Station in New York, yesterday agreed to a 400p-per-share takeover by Texas-based Quanex Building Products. This values the London-listed firm at £788million. 

Aside from updating one of New York’s most famous train stations, Tyman has worked on Crossrail as well as Spain’s Hotel Palacio Colomera and France’s Le Grenier des Arts.

If the takeover goes ahead, Quanex will delist Tyman from the London stock market and ditch its head office in the capital.

It will instead push for a listing in New York. Tyman shares soared 34 per cent, or 100.5p, to 396.5p. 

And in yet another blow to the City, music firm Hipgnosis yesterday found itself in the midst of a bidding war.

Shares in the company, which owns the rights to back catalogues ranging from Blondie  to Neil Young, rose 11.6 per cent, or 10.7p, to 102.6p after it supported a 100p-a-share offer from Blackstone. 

The US private equity giant’s bid was higher than the 93p-a-share offer Hipgnosis backed last week from music rights rival Concord Chorus, which is backed by private equity group Apollo. 

Hipgnosis, which allows investors to earn royalties every time a song whose rights it owns is played, said it ‘would be minded’ to recommend the new bid from Blackstone.

Russ Mould, investment director at investment platform AJ Bell, said: ‘While individually these deals may not make much of a ripple, when you consider the sheer volume of firms being snapped up by overseas buyers, the UK market is experiencing death by a thousand cuts.’

There are growing concerns in the City and Westminster that a lack of investment in UK stocks has left them undervalued and vulnerable to foreign predators. 

And some companies including Paddy Power-owner Betfair, building supplier CRH and plumbing group Ferguson are choosing to leave the London market and instead list elsewhere, such as New York.

A further cause for concern is the lack of companies joining the stock market through so-called initial public offerings.

This post first appeared on Dailymail.co.uk