The pace of takeovers in Britain is as strong as ever, despite perceived Brexit uncertainties.
In the last few days we have seen a bid for car maker Vauxhall and a deal bringing together savings behemoths Aberdeen Asset Management and Standard Life.
Data from the Office for National Statistics shows the current buoyant merger market follows the trend set in 2016.
In spite of Theresa May’s Downing Street promise to scrutinise overseas bids, this form of M&A reached a record of £187.4billion in 2016.
Ineffective: In spite of Theresa May’s Downing Street promise to scrutinise overseas bids, the pace of takeovers in Britain is as strong as ever
Among the attractions of Britain for overseas marauders has been the weakness of the pound since Brexit, which has made UK equities relatively cheap.
That is by no means the only factor. It also reflects the last chance saloon for cheap credit – with most forecasters predicting higher US interest rates in the coming months – and Britain’s enlightened attitude to newcomers.
The UK was perfectly happy to get behind Japanese-owned Softbank’s £23.4billion bid for Cambridge-based ARM, even though it may result in Britain’s leadership in the ‘internet of things’ being eroded.
The UK’s tendency not to interfere in the free market also had an impact domestically. The ONS figures show that domestic deals came in at £23.9billion last year, the highest figure since the financial crisis in 2008.
In stark contrast, British-based companies spent a relatively modest £16.7billion on buying firms overseas last year, down on 2015.
It is possible that they were put off both by the currency impact, which makes overseas assets more expensive in sterling terms, and the surge in stock market values in the United States where equity values keep hitting records.
It would be nice to think that British companies have become more cautious after some shocking experiences overseas, such as Cobham’s poor judgement in the US and BT in Italy, but that is doubtful.
What is certain is that while British corporations may be cautious on investment in the UK, overseas companies are not.
From the ‘Cheesegrater’ in the City to the failed assault on Unilever by Kraft, interest in UK commerce is as powerful as ever.
How reassuring it would be if British firms and investors showed the same enthusiasm in UK plc as their foreign counterparts. Then we could be sure that Brexit was less disruptive.
There may have been no shortage of bid activity since last June’s Brexit vote but in contrast, flotations have been sparse.
The much heralded return of UK financial software group Misys to the London Stock Exchange, with an inflated value of £5.5billion attached, was abandoned after a roadshow last autumn.
It is reportedly looking to Nasdaq in New York. Other UK initial public offerings also are taking their time to get off the ground.
Among Britain’s tech successes has been the creation of robust comparison sites, which have disrupted traditional sales and distribution practices.
The South African controlled group BGL, owner of Compare The Market’s website, produced robust results earlier this week and is showing progress across all divisions, including its French insurance comparison site.
It is still planning an IPO this year, but the timing remains fuzzy. The biggest UK float of all, the O2 mobile network, part of Spain’s Telefonica, was also planned for the first quarter but has gone quiet for the moment.
All this is a little surprising given the current buoyancy of equity markets on both sides of the Atlantic as the Trump and post-Brexit rallies run their course. There have been no tech IPOs so far this year after a minuscule £525million was raised in 2016.
On the other side of the Atlantic, the hype and enthusiasm for the Snap Inc float may be receding rapidly.
But a company which has never made a profit and has no corporate governance to speak of is valued at over £20billion. There has to be an incredible growth story for that to be justified. We wait to see if BGL, O2 and others are sufficiently brave to reach for the coat-tails.
Charlotte Hogg has had one of those charmed careers in the financial community, which most could only dream of, rising to deputy governor of the Bank of England at the relatively tender age of 46.
When life has been that smooth, it is perhaps easy to understand how she could forget an obligation to declare that her brother was a senior executive of Barclays, one of the key players in the markets she will now be policing.
Among high fliers, petty matters such as codes of conduct are easily overlooked, even if you happened to write them.
They are for someone else.