Burberry tops list of UK M&A targets in new Bloomberg survey
London-listed stocks account for about 60% of companies mentioned in an informal survey conducted by Bloomberg News in July. The poll included 44 risk-arbitrage desks, traders, and analysts. Burberry, the iconic trench coat maker, was the most frequently cited company, selected seven times.
UK stocks have remained favored M&A targets over the past year, partly due to their relative undervaluation compared to international peers. This has led to a series of delistings that have further reduced the size of the local stock market. London's FTSE 100 Index trades about 13% below the Euro Stoxx 50 Index and 41% below the S&P 500, based on valuation relative to earnings forecasts.
In Burberry's case, there are signs that the brand is beginning to deliver on its turnaround plan under Chief Executive Officer Joshua Schulman. After back-to-back annual declines of 30%, the stock has risen 32% in 2025.
According to Emmanuel Valavanis, an equity sales specialist at Forte Securities in London, Burberry's brand equity could be attractive to a larger luxury group 'not afraid to pay up for bolt-on growth and an iconic label.'
However, the transformation is not yet complete. 'Burberry's renewal effort still needs more work,' said Graham Simpson of Canaccord Genuity Quest, adding that a potential suitor would likely focus on extracting synergies.
BP Plc and Anglo American Plc also featured among the leading UK takeover candidates, consistent with their inclusion in a similar January survey. Rightmove Plc, the online property portal, received four mentions after drawing multiple bids last year from Rupert Murdoch's REA Group.
UK dealmaking 'roared back' in the second quarter, said Patrick Sarch, head of UK public M&A at law firm White & Case LLP, in July.
'We anticipate more bids for UK companies from US and corporate bidders, and that the financial services, infrastructure, natural resources, and tech sectors will continue to be active,' Sarch added.
Outside the UK, the recent trade agreement between the European Union and the United States is expected to 'encourage corporates to go ahead with planned transactions,' according to Eric Meyer, head of RBC Capital Markets in Paris.
Among continental names, Carrefour SA was a frequently mentioned target, cited four times by respondents. The supermarket chain is currently reviewing its portfolio to improve its valuation and recently divested its struggling Italian business.
European banking M&A also remains active, continuing a trend from 2024. Commerzbank AG was again a popular name in the latest survey. UniCredit SpA, which has expressed interest in acquiring Commerzbank, increased its stake to about 20% this month. The move makes UniCredit the bank's largest shareholder, overtaking the German government, which remains opposed to a takeover.
'Bank deals are becoming more complicated,' said Nicolas Marmurek, co-head of special situations at Square Global Markets. 'Successful bidders will need strategy, timing, and just the right dose of political finesse.'
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