London Stock Exchange becomes car boot sale for foreign bargain hunters

THE London Stock Market has become a car boot sale for foreign buyers looking for a bargain.

British technology company Spirent Communications has become the latest company to fall prey to a foreign bidder – which yesterday agreed to a £1 billion takeover by US rival Viavi Solutions.

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The deal comes amid a wave of takeover interest in British companies with insurer Direct Line, electricity chain Currys and transporter Wincanton all having been approached.

It follows a deal-making drought, but bankers predict this is just the start of a feeding frenzy as punishing stock markets have wiped millions off the valuations of London companies, making them cheap.

Foreign buyers are also more confident about investing in Britain as data suggests the economy is already recovering from a mild recession.

Arizona-based Viavi made an opportunistic attack on Spirent, which lost half its valuation over the past year due to declining profits in tough markets.

However, the West Sussex-based company’s shares rose 62 per cent yesterday to 176.10p – just above Viavi’s 175p per share offer.

The acquisition marks a step change in the way foreign buyers are turning to private equity to help finance bids, rather than using their own cash resources.

Viavi is using a mix of its own money and a £313 million loan from takeover company Silver Lake.

It allowed Viavi to make a knockout bid that represents a 61 percent premium to Spirent’s share price and not expand its own balance sheet.

Private equity firms are awash with around £3.4 trillion of idle cash – the so-called dry powder – that could be used to fund even more UK takeovers.

Charles Hall, of investment bank Peel Hunt, says 40 British companies left the London market last year.

He warned: “The small and medium sector is particularly vulnerable and if nothing is done we will lose an important engine of economic growth and tax revenues.”

The takeover of Spirent will also mean the loss of another company on the shrinking London stock market after the likes of gambling firm Flutter, building materials group CRH and travel group TUI exited.

Spirent’s origins date back to 1936, when Jack Bowthorpe used £2,000 of family money to set up a company that “filled the niches in the electrical and electronics market”.

It is now focusing on 5G technology used by mobile phones.

VANS LIFT IN FLEET BOOSTER

VANS saw its biggest sales increase since 1998 last month as corporate fleets support automotive industry growth.

The number of registered vans grew by 2.2 percent to 17.93.

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The Society for Motor Manufacturers and Traders called it the best performance in February in more than a quarter of a century.

The automotive industry is growing again after the pandemic, with total vehicle registrations increasing by 14 percent to 84,886, according to the SMMT.

Meanwhile, sales of electric cars fell by a fifth after the Chancellor was called to cut VAT on electric cars and their charging points.

As leasing companies and firms buy cars, electric vehicle registrations rose to 35,900 in two months, of which only 6,500 were by regular drivers – up from 7,900 the year before.

The SMMT said reducing VAT on electric cars from 20 per cent to 10 per cent would save the average buyer £4,000.

MONZO’S GREAT VALUE

DIGITAL bank Monzo has been valued at £3.9 billion after raising new funding.

The bank – known for its brightly colored coral cards – now has more than nine million customers, after adding another two million last year.

It raised £340m from US investor CapitalG, which is owned by Google’s parent group Alphabet and also backs Airbnb and Duolingo.

Monzo now plans to enter the US market.

BE OF SERVICE

CHANCELLOR Jeremy Hunt has received a pre-Budget boost as the services sector grew for a fourth consecutive month, amid the fastest rise in new work in nine months.

A study found that growth in the sector was fueled by rising business and consumer spending.

Economists said the data suggests the “economy has turned a corner” and is recovering from the mild recession.

Companies also reported a ‘solid increase’ in new orders, signaling renewed confidence in investment.

That’s a little rich, JEFF

AMAZON founder Jeff Bezos has managed to dethrone Elon Musk and once again become the richest person on earth.

Mr Bezos has topped the Bloomberg Billionaires Index for the first time since 2021 with a fortune of £157 billion, helped by his stake in Apple which has risen in value.

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Meanwhile, tycoon Musk’s Tesla has fallen in value due to investor fears over falling sales of electric vehicles.

Apple is now worth £1.37 trillion and Mr Bezos still owns a 10 per cent stake in the company.

He co-founded Amazon with his ex-wife Mackenzie Scott in 1994 from his garage in Washington, US, as an online bookstore.

TESCO WAGE INCREASES

TESCO is spending £300m to boost staff wages to keep pace with its rivals’ rises.

Britain’s largest supermarket, which employs 330,000 people, said it would increase wages by 9.1 percent.

The basic hourly rate will increase from £11.02 to £12.02, while the salary of those working within the M25 will increase from £11.95 to £13.15.

Retailers need to raise wages to retain staff, but the Bank of England has expressed nervousness that an upward wage spiral could make it harder to fight inflation.