Dried-up deals market leaves Takeover Panel with its first deficit in years
The acquisitions regulator said there had been no deals in the UK valued at more than £1 billion in the second half of its financial year.
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Your support makes all the difference.The body which regulates company acquisitions in the UK has recorded its first financial deficit in several years after a large decline in the number of deals being sealed.
The Takeover Panel, which is funded by a levy on deals, said it had a deficit of £3.8 million after interest and tax during the last financial year. It was down from a surplus of £1.7 million a year earlier.
The body said that in the second part of the year – the six months to March – there was a “significant decline” in the flow of deals in the UK.
This substantial decline in market activity, coupled with exceptional legal costs this year, has led to the panel recording its first deficit for several years
It blamed “a difficult economic environment and challenging debt markets” for the issue.
It said that there had been 48 firm offers in the year as a whole, 12 of which were valued at above £1 billion. None of the billion-pound deals were announced in the second half of the year.
“This substantial decline in market activity, coupled with exceptional legal costs this year, has led to the panel recording its first deficit for several years,” said chairman Chris Saul.
“The start of the year to March 2024 has shown some increase in activity although it is not yet clear how strong or sustained this will be.”
The big deals are particularly important for the panel. It charges a levy based on the size of the deal. So every deal valued at £1 billion or more gets it an income of at least £130,000, more if they are bigger.
This compares with a fee of just £5,500 if the deal is worth between £5-10 million.
The Takeover Panel is tasked with enforcing the Takeover Code, a set of rules intended to ensure that shareholders are treated fairly during any merger or acquisition.