The numbers speak for themselves. In 2015, more than 2,400 companies were listed on the stock market. Today, there are barely 1,400. Some firms have collapsed, some have delisted but most have been taken over.
Across the globe, eagle-eyed predators are sizing up UK businesses, spotting a once-in-a-generation opportunity to bag themselves a bargain. Interest stems from Indian billionaires, Asian conglomerates, Gulf-based financiers and deep-pocketed Americans. But they all recognise something home-grown institutions seem to have overlooked, that the UK is stuffed full of exciting businesses, which are far too cheap.
The trend has set alarm bells ringing in the City, in government and among millions of individual investors. But for money-seeking market-watchers this sorry state of affairs begs one obvious question: who will be next?
Of course, no one knows for sure but, across the market, a number of companies stand out as potential bid candidates. Some are multibillion-pound giants. Others are tiddlers. But in every case, their share price fails to reflect their inherent value, making them ideal prey for canny acquirers.
Filtronic
Spun out of Leeds University in 1977, Filtronic was an electronics pioneer from the start. The group listed on the stock market in 1994, expanded rapidly and by the height of the dotcom boom its shares had soared to more than £4. They then fell to earth, slumping to below 30p and barely moving for years. But the group persevered, quietly developing top-tier radio-frequency products used by industries from aerospace to quantum computing.
That perseverance paid off and last year, Elon Musk came a-calling. The US billionaire chose Filtronic as a strategic partner for SpaceX, his galaxy-bound venture recently valued at $350 billion (£275 billion). Besides striving to boldly go where no man has gone before, SpaceX operates Starlink broadband, providing high-speed internet services via satellite to users around the world. Filtronic signed an initial contract with Musk last April but he keeps coming back for more, with a new deal signed only last month. Filtronic shares have more than doubled to £1.04 since last year but the group is still valued on the stock market at less than £250 million, a minor morsel for an ambitious technology company or private equity house.
B&M
Value retailer B&M has issued two profit warnings since January, boss Alex Russo is leaving early and the future looks uncertain. B&M's range is huge, from lino flooring to Lego and frozen peas to puppy treats. But sales have been weak for a while, the group fell out of the FTSE100 last December and the shares have tumbled from more than £6.40 to £2.76.
B&M was acquired by Simon, Robin and Bobby Arora in 2004, when there were just 21 stores. The three brothers built the business into a retail success story, with more than 1,000 sites here in Britain, but Simon left in 2022, Robin is no longer involved and Bobby declared last year that he would step down in 2025, earlier than planned. What better timing for a bid?
B&M is admittedly a hefty mouthful, valued on the stock market at almost £3 billion, but the group is relatively cheap compared with peers and a determined predator could find plenty to chew over at the current price.
ITV
Amid persistent talk about potential takeovers, one name crops up more than any other, ITV.
As Britain's biggest commercial channel, ITV is home to some of the nation's favourites, from Coronation Street and Emmerdale to The Bill and Love Island. But the group has expanded into a global production business, making programmes for customers including the BBC, Netflix and Disney. Best-sellers range from high-brow quiz show University Challenge to Jilly Cooper's rompathon Rivals, for Disney+.
But ITV shares have slumped from £2.80 in 2015 to 71p today. Results for 2024 will be unveiled this week and are unlikely to set pulses racing. In the long-term, however, ITV could prove a jewel for a patient or deep-pocketed suitor, with some analysts suggesting that the Studios business alone is worth more than the entire £2.7 billion valuation of the group.
Ocado
In 2021, when we thought online shopping would dominate our lives forever, Ocado shares topped £27. Today, they are £2.63. Formed by a trio of Goldman Sachs bankers in 2000, Ocado has consistently disappointed investors and last week was no exception.
Shares fell by 20 per cent as boss and co-founder Tim Steiner unveiled higher than expected losses of £340 million for 2024 and said the group would remain loss-making until 2026.
The business is best known as an upscale online supermarket, a pioneer back in the day, now forced to compete with the grocery big boys. But Ocado does have another string to its bow, however, licensing its top technology to retailers around the world. The division has taken years to develop but is now gaining partners, from Coles in Australia to Auchan in Poland.
That growth, combined with the core UK business, could make Ocado an appealing target for private equity. Valued at £2.3 billion, the group is not cheap but the tumbling share price makes this firm vulnerable.
Finseta
Foreign exchange specialist Finseta is growing fast and expects to continue in that vein. The group's technology allows customers to hold accounts in several currencies and make overseas payments with ease.
Chief executive James Hickman recently told investors that sales grew 26 per cent last year to £11.3 million, earnings rose 18 per cent to £2 million and regular customers now exceed 1,000. Confident about the future, Hickman is expanding overseas and expects progress to continue.
Finseta's share price, however, has tumbled from 58p in 2021 to 30p today. With brokers suggesting the stock is worth double its current value, this smart fintech firm could easily be snapped up.
And don't forget my previous Midas tips well worth revisiting
Diageo
Drinks giant Diageo spent years as a stock market darling, particularly during the pandemic, when the shares topped £40. With a stable of top brands, spanning Guinness, Johnny Walker, Tanqueray gin and Smirnoff vodka, Diageo seemed unstoppable. But the group has struggled under chief executive Debra Crew and investors have been unimpressed, chasing Diageo shares down to £21.62.
Midas recommended Diageo shares in 2017, when they were just over £23 so today's price is disappointing but could entice an opportunist. Abstinence may be a growing trend among the young, but Diageo owns a number of non-alcoholic brands too and its top-quality tipples remain popular worldwide. The company is valued on the market at £48 billion, so any bidder would need deep pockets but Diageo would almost certainly deliver long-term rewards.
Boku
By 2028, forecasters estimate there will be about 900 billion mobile phone payments a year, worth more than £7 trillion. Aim-listed Boku helps to make these payments possible and customers read like a roster of the world's best-known technology giants, including Google, Facebook, Microsoft, Netflix, Sony and China's Tencent. The company's technology allows consumers to pay for music, games and films on their phones and create digital wallets to store money.
Midas tipped Boku at 59p in 2020, since when the group has come on by leaps and bounds. Yet Boku shares have fallen by 20 per cent over the past year to £1.57, valuing the business at £466 million. At this level, they remain far cheaper than American peers, making the company highly attractive to any US buyer looking for cut-price, world-beating technology.
RWS
Andrew Brode took over translation specialist RWS in 1995, floated the business in 2003, stood as chairman for 20 years and remains a board director, with 24 per cent of the shares. That holding served Brode well for many years. RWS is one of the world's foremost translation and patent businesses, with customers including Coca-Cola, Honda and the US Navy. But conditions have been difficult in recent years, there have been several profit warnings and RWS shares have slumped from £7 to just £1.22.
Brode, now 84, has also experienced disappointment at Learning Technologies Group (LTG), which he has chaired for more than a decade. The stock had declined sharply in recent years and Brode, a 14 per cent shareholder, recently accepted a takeover from US private equity firm General Atlantic.
His capitulation may tempt bidders to look more closely at RWS. Midas recommended the shares many moons ago at 48p so investors are still in the money. But RWS has been through the mill and a predator may think now is just the time to swoop.
Macfarlane
Glasgow-based packaging group Macfarlane joined the stock market in 1973 and has been through many ups and downs since. But resilience has been a hallmark of the business, not least under Peter Atkinson, at the helm since 2003.
Unveiling 2024 figures last week, Atkinson admitted that conditions have been challenging but the group still delivered rising profits, an increase in the dividend and a growing pipeline of new business. Midas recommended the stock at 27p in 2012 so long-term investors have done well but the shares have been unloved lately, falling from £1.40 to £1.03 since last spring. At this level, they are looking cheap and could tempt a buyer looking beyond the short term.
Cohort
Defence company Chemring saw its share price rocket after US private equity firm Bain made a £1.1billion bid for the company. Neither side has formally commented but market watchers are already wondering who might be next and Cohort has been mentioned more than once.
Midas tipped the shares at £5.29 in 2022, since when they have more than doubled to £10.80. The performance follows a period of strong growth, with boss Andy Thomis recently reporting better-than-expected first-half profits, a record order book and real confidence in the medium term. Cohort works closely with the Ministry of Defence so investors may think the business would be protected from overseas offers.
But others in the sector have been snapped up all too easily.
How our foresight has paid off in recent months
A dozen Midas tips, across a range of industries, have either been acquired or received a bid approach in the past three months and every single offer is backed by overseas cash.
In each case, however, foreign bidders are prepared to pay far more for these businesses than they are valued on our own stock market – a signal that overseas firms believe more in UK plc than home-grown investors do.
Eight of the 12 are funded by bargain-hunting private equity or specialist investment groups.
Digital training firm Learning Technologies Group (LTG) tops the chart, tipped at 20.25p in 2014 and acquired for £1 by US financiers. LTG was trading at just 75p before they pounced.
Marine technology firm Windward, recommended last summer, at £1.03 and succumbed to a £2.15 approach on Christmas Eve, while GP surgery owner Assura was tipped just two months ago. Last month, US firm KKR unveiled a £1.6 billion bid, valuing each share at 48p. The offer was rejected but watch this space.
Digital specialist Team Internet was tipped at 51p in 2017 and changed its name from CentralNic in 2023. Stockholm-based Verdane made a £1.25 offer in January and are mulling a formal approach.
Only one bid has come in below the Midas recommendation price. Infrastructure group BBGI was tipped at £1.66 in 2021 but last month agreed to be taken over by a Canadian pension fund for £1.47½ per share.
Compare the best DIY investing platforms and stocks & shares Isas
Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you.
When it comes to choosing a DIY investing platform, stocks & shares Isa or a general investing account, the range of options might seem overwhelming.
Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts.
When weighing up the right one for you, it's important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs.
To help you compare the best investment accounts, we've crunched the facts and pulled together a comprehensive guide to choosing the best and cheapest investing account for you.
We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide linked here.
>> This is Money's full guide to the best investing platforms and Isas
Platforms featured below are independently selected by This is Money’s specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence.
| Admin charge | Charges notes | Fund dealing | Standard share, trust, ETF dealing | Regular investing | Dividend reinvestment | ||
|---|---|---|---|---|---|---|---|
| AJ Bell* | 0.25% | Max £3.50 per month for shares, trusts, ETFs. | £1.50 | £5 | £1.50 | £1.50 per deal | More details |
| Bestinvest* | 0.40% (0.2% for ready made portfolios) | Account fee cut to 0.2% for ready made investments | Free | £4.95 | Free for funds | Free for income funds | More details |
| Charles Stanley Direct* | 0.35% | No platform fee on shares if a trade in that month and annual max of £240 | Free | £11.50 | n/a | n/a | More details |
| Etoro* No investment funds or Sipp | Free | Stocks, investment trusts and ETFs. | Not available | Free | n/a | n/a | More details |
| Fidelity* | 0.35% on funds | £7.50 per month up to £25,000 or 0.35% with regular savings plan. | Free | £7.50 | Free funds £1.50 shares, trusts ETFs | £1.50 | More details |
| Freetrade* No investment funds | Basic account free, Standard with Isa £5.99, Plus £11.99 | Stocks, investment trusts and ETFs. | No funds | Free | n/a | n/a | More details |
| Hargreaves Lansdown* | 0.45% | Capped at £45 for shares, trusts, ETFs | Free | £11.95 | Free | Free | More details |
| Interactive Investor* | £4.99 per month under £50k, £11.99 above, £10 extra for Sipp | Free trade worth £3.99 per month (does not apply to £4.99 plan) | £3.99 | £3.99 | Free | £0.99 | More details |
| iWeb | Free | £5 | £5 | n/a | 2%, max £5 | More details | |
| Trading 212* | Free | Stocks, investment trusts and ETFs. | Not available | Free | n/a | Free | More details |
| Vanguard Only Vanguard's own products | 0.15% | Only Vanguard funds | Free | Free only Vanguard ETFs | Free | n/a | More details |
| (Source: ThisisMoney.co.uk Jan 2025. Admin % charge may be levied monthly or quarterly | |||||||
