RE: Three British giants ripe for a foreign takeover20 Aug 2019 17:05
Greene King has been bought by Hong Kong’s richest man but the FTSE 250 brewer may not be the last British giant to fall prey to international rivals, according to experts. A weaker currency has meant British stocks are significantly cheaper for foreign companies to buy out. Tobacco stock Imperial Brands, shopping centre owner Intu and broadcaster ITV could all be candidates as long as the pound remains at depressed levels. The pound has fallen 5pc against the dollar in 2019, mostly in the past month, and was cited as a huge factor in Green King being bought out by CK Asset, a part of CK Hutchison, and controlled by 91-year-old billionaire Li Ka-shing. It made an offer of 850p per share deal, a premium of more than 50pc to the previous day’s closing share price.
Below, Telegraph Money looks at three potential candidates to be bought out by overseas investors.
ITV
A company perennially discussed as a takeover target is broadcaster ITV. Its share price has also halved in the past five years and trades 62pc below its August 2015 peak, due to its struggl to earn advertising revenue.
It has a dividend yield of 7pc and its shares trade at 8 times higher than its earnings, a much cheaper level compared to other companies. Liberty Global, the American-based owner of Virgin Media, is a major shareholder, so a foreign takeover is never out of the question, particular given continued pressure on the pound.
Ian Forrest, of broker The Share Centre, said despite this risk, the company remained a strong one, as it moved to diversify from pure advertising revenue. It’s continued dedication to producing new content should also reduce its dependency on external advertisers. Mr Forrest also noted that the newly announced winter series of Love Island, a huge success for the company. The launch of its streaming service BritBox should also mean the company attracts bigger audiences.
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