Looking at UK Plc, you could be forgiven for wondering, what on earth is going on? On the one side, there are domestic company bosses galore moaning loudly about supply problems, staff shortages and predicting dire consequences. On the other, there is the almost daily occurrence of a foreign investor swooping into buy another British business.
It does not make sense. Yet it is true, the City, the part that advises on takeovers, has never been busier. In the somewhat dated parlance of my friends in the Square Mile, it has gone “gangbusters”. So far this year, we have seen 39 bids for British firms, all of them aimed at taking them private, and only two short of the total for the whole of 2020.
In the more polite words of Richard Buxton, a veteran fund manager of Jupiter Asset Management: “This year it’s all been unleashed.” Kwasi Kwarteng, the business secretary, prefers to put it differently, saying the unprecedented activity shows that Britain is “open for business”.
That’s as maybe, minister. But does it really explain a wide array of acquisitions, from Blackstone picking up St Modwen, the large property company and Signature Aviation, the private jet services operator, to KKR buying John Laing, the infrastructure firm? Sumo, a leading video games creator, has accepted a bid from Tencent of China, for $1.2 billion. There is a bidding war under way between US corporate and private equity giants for Morrisons supermarkets, which goes to auction next month.
There is a battle between foreigners taking place for Vectura, the inhaler-maker, and Mr Kwarteng has ordered an inquiry into the US purchase of defence contractor Ultra Electronics. Meanwhile, he is keeping an eye on the continuing scrap, again with national security implications, and also involving overseas investors, for major military engineer Meggitt. And the controversy surrounding the $40bn play from US tech giant Nvidia for semiconductor designer Arm Holdings rumbles on.
Even small companies are causing alarm. Officials have been asked to re-examine the acquisition of Newport Water Fab by a Chinese firm, and Perpetuus - a tiny maker of graphene (14 employees and sales last year of £479,000 ($661,353) - finds itself under review after a bid by a Chinese academic. Perpetuus may be small but the potential could be enormous. It manufactures graphene, hailed as the lightest and thinnest “supermaterial” known.
British supermarket chain Morrisons has accepted a £7bn counter-offer from investment firm CD&R and withdrawn its support for a rival, lower bid from Fortress. AFP
This is merely a selection, and there may be plenty more to come. According to markets analyst PitchBook, global investment companies are sitting on a whopping $1.3 trillion in cash, with much of that firepower likely to be directed at Britain.
In a sense, Mr Kwarteng is correct. Britain is a good place in which to do business. Our regulations are relatively relaxed, our legal system is world-renowned, education is strong, we speak English, the universal language, London is a great base in which to live and work, we are a user-friendly springboard to Europe. This is how Americans and overseas investors have long viewed the UK.
So, seen like that, this current frenzy is testament to the UK’s excellence and popularity. Mr Kwarteng and his colleagues should doubtless pat themselves on the back: while other places in the world are shunned, people with money want to be here.
There is, though, another reason for the country’s appeal. It is cheap. One top City fund manager told me he reckoned that the UK was offering a “25 per cent discount” versus comparable assets elsewhere. This is not so much a desire to buy British and never mind the cost, as bargain hunting on an epic scale. Britain, right now, is the equivalent of one giant showroom in which all the prices are slashed.
“The UK is cheap, and it has got broadly cheaper post-Covid and Brexit,” said Edward Bonham Carter, another leading fund manager.
Company valuations have been depressed by the pandemic. In the UK’s case, they were already brought lower by years of Brexit uncertainty. The pound sterling is also weaker for much the same reason. In the absence of a strong lead from the government as to the future direction and outlook for the economy, that’s where they have remained, there is no sign of any upturn.
The UK is cheap, and it has got broadly cheaper post-Covid and Brexit
Edward Bonham Carter
To be fair to ministers, it is early to be champing at the bit for clear forecasts and figures on which to recalculate valuations — they have, after all, been blindsided by Covid, and its effects are still being felt and causing unpredictability. But it is certainly the case that the wave of foreign buyers is the result of Brexit — the UK is a nation with well-run companies that don’t know where they are heading thanks to leaving the EU, but what they have got is worth having.
This is definitely the attraction of Morrisons, for example, where the retail chain, which prides itself on growing and farming a substantial portion of its products to cut out the middleman, is sitting on assets more valuable than the stock market capitalisation attached to the overall holding company.
Britain has a whole buffet to choose from, of traditional, “legacy” enterprises in retailing, engineering, manufacturing, that to foreign would-be owners, should be more expensive to buy. By the same token, however, we are not pricing newer industries properly either. Our tech and data companies may attract what appear to be high offers, but they lag their global cousins.
Nick Train, who runs the £6.5bn Lindsell Train UK Equity fund, said UK digital and data companies appear cheap to foreigners, especially those from the US where tech prices are higher. “Investors, particularly US investors, understand the value that digital and data companies generate for their owners when they grow. Their capital intensity is low, meaning returns on capital are high and copious cash generated. I say particularly US investors, because companies with similar characteristics have been right at the forefront of the bull market there and very high valuations have been achieved.”
In some ways what is happening is what the City refers to as the “Wimbledon” effect, writ large. Each year, Britain hosts the best, most prestigious tennis tournament in the world and each year, a player from abroad wins it and worse, domestic players usually bow out in the early rounds. We do, though, know how to put on a cracking event. That was not true when Andy Murray was in his pomp, then there was a blip, but recently, normal service has been resumed.
Britain is “open for business” then, it is just a pity that the “sale” poster is so tightly glued to the shop window.
MATCH INFO
Karnatake Tuskers 114-1 (10 ovs)
Charles 57, Amla 47
Bangla Tigers 117-5 (8.5 ovs)
Fletcher 40, Moores 28 no, Lamichhane 2-9
Bangla Tiger win by five wickets
Brief scores:
Toss: Sindhis, elected to field first
Pakhtoons 137-6 (10 ov)
Fletcher 68 not out; Cutting 2-14
Sindhis 129-8 (10 ov)
Perera 47; Sohail 2-18
FIXTURES
All games 6pm UAE on Sunday:
Arsenal v Watford
Burnley v Brighton
Chelsea v Wolves
Crystal Palace v Tottenham
Everton v Bournemouth
Leicester v Man United
Man City v Norwich
Newcastle v Liverpool
Southampton v Sheffield United
West Ham v Aston Villa
Itcan profile
Founders: Mansour Althani and Abdullah Althani
Based: Business Bay, with offices in Saudi Arabia, Egypt and India
Sector: Technology, digital marketing and e-commerce
Size: 70 employees
Revenue: On track to make Dh100 million in revenue this year since its 2015 launch
Funding: Self-funded to date
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Eoin Morgan (captain), Moeen Ali, Jonny Bairstow, Sam Billings, Jos Buttler, Tom Curran, Alex Hales, Liam Plunkett, Adil Rashid, Joe Root, Jason Roy, Ben Stokes, David Willey, Chris Woakes, Mark Wood
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Uefa Champions League semi-finals, first leg
Liverpool v Roma When: April 24, 10.45pm kick-off (UAE) Where: Anfield, Liverpool Live: BeIN Sports HD Second leg: May 2, Stadio Olimpico, Rome
Both matches at ICC Academy, Dubai. Admission is free.
1st match: Friday, 2pm
2nd match: Saturday, 2pm
UAE squad: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Rameez Shahzad, Amjad Gul, CP Rizwan, Mohammed Boota, Abdul Shakoor, Ahmed Raza, Imran Haider, Sultan Ahmed, Zahoor Khan, Amir Hayat
USA squad: Saurabh Netravalkar (captain), Jaskaran Malhotra, Elmore Hutchinson, Aaron Jones, Nosthush Kenjige, Ali Khan, Jannisar Khan, Xavier Marshall, Monank Patel, Timil Patel, Roy Silva, Jessy Singh, Steven Taylor, Hayden Walsh
Who is Allegra Stratton?
Previously worked at The Guardian, BBC’s Newsnight programme and ITV News
Took up a public relations role for Chancellor Rishi Sunak in April 2020
In October 2020 she was hired to lead No 10’s planned daily televised press briefings
The idea was later scrapped and she was appointed spokeswoman for Cop26
Ms Stratton, 41, is married to James Forsyth, the political editor of The Spectator
She has strong connections to the Conservative establishment
Mr Sunak served as best man at her 2011 wedding to Mr Forsyth
THE BIO
Favourite author - Paulo Coelho
Favourite holiday destination - Cuba
New York Times or Jordan Times? NYT is a school and JT was my practice field
