Fears grow over London market in ‘bid fever’ for UK tech firms

A trio of UK technology companies are to be sold to American buyers for a total of more than £6 billion on a day of “bid fever” that intensified concerns over the country’s ability to retain and scale innovative companies.

The takeovers include Spectris, the UK’s leading listed industrial technology company, which received a £3.7 billion offer from the American private equity firm Advent International; and the chip designer Alphawave IP Group, which recommended a £1.8 billion acquisition by Qualcomm, based in California.

Oxford Ionics, a quantum computing start-up founded by two Oxford University PhD students, agreed to be sold to Ion Q, a larger US company, for about $1 billion.

The latest flurry of takeovers followed renewed concerns last week about the strength of the UK’s capital markets after Wise, one of Britain’s leading fintechs, announced surprise plans to move its primary listing to New York.

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Monday’s deals coincided with the start of London Tech Week, where Sir Keir Starmer opened proceedings alongside Jensen Huang, the chief executive of Nvidia, one of the world’s most valuable companies.

The competitiveness of Europe’s tech scene was a dominant theme at the event, which also featured Markus Villig, chief executive of the ride-hailing business Bolt, who said: “We’ve got to face it that Europe doesn’t have a great track record of even having IPOs, not to mention having them actually stay here.”

Markus Villig, the boss of Bolt, said: “We’ve got to face it that Europe doesn’t have a great track record of even having IPOs”

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He said one of the root causes was a lack of liquidity and many European companies were raising most of their funding from the US. He added, however, that he had not written off London as a location for Bolt’s planned float and was optimistic that “Europe will get there”.

The entrepreneur and venture capitalist Hermann Hauser, founder of Arm, one of the UK’s biggest tech success stories, said the UK was vulnerable as “we don’t have a start-up problem, but we do have a scale-up problem”.

Hermann Hauser, founder of Arm and an investor in Oxford Ionics, with Anne Glover, said: “We don’t have a start-up problem, but we do have a scale-up problem”

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But Hauser, who is among the investors in Oxford Ionics, spun out of Oxford University in 2019, and a member of the European Innovation Council fund board, said the agreed sale to Ion Q, listed in New York, was a “positive outcome” because “a lot of the investment will remain in the UK”.

In a note to clients entitled “UK for sale”, Charles Hall, head of research at the investment bank Peel Hunt, said: “Companies in the UK seem to be far more attractive to acquirers than investors. The root cause is the consistent outflow of capital from domestic markets. If we want the UK equity market to thrive, an urgent rethink is required to ensure that UK capital backs UK companies.”

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Consecutive governments, and bosses at the London Stock Exchange and Financial Conduct Authority, have sought to shake up the appeal of the City to global investors through a series of reforms. These include loosening listing rules and encouraging pension funds to invest in British companies.

There have been 30 bids for UK companies with £100 million-plus market values this year, worth a combined £25 billion, Peel Hunt said. Spectris and Alphawave are the largest.

Hall said the average premium was 43 per cent, “which shows the scale of undervaluation in the UK”.