Private equity’s London takeover spree goes on – and the politicians ignore it
Bodycote, a Macclesfield-based industrial firm and the world's largest provider of heat treatment and metallurgical technologies, has agreed to be bought by US private equity firm Veritas for £1.65bn, or £1.85bn including debt. The deal is the latest in a long run of overseas takeovers of FTSE 250 industrial companies, undermining the government's stated ambition to "reindustrialise" the UK even as more British firms move into foreign ownership.
Veritas's offer of 940p a share represents only a 25% premium on Bodycote's pre-bid price, and analysts note the valuation is unremarkable, roughly in line with the company's 10-year average earnings multiple. A rival European bidder, CVC, may yet return with a higher offer, with Bodycote shares closing at 955p on speculation of a counter-bid; US firm Apollo had also shown interest at 885p earlier in the year before withdrawing. The takeover would end Bodycote's 54-year run on the London stock market, following other recent departures including telecoms firm Gamma Communications (£1.1bn) and Scottish energy firm Capricorn (£292m); Bodycote operates 130 sites across 22 countries and employs 4,000 people.
- Bodycote agrees £1.65bn takeover by US firm Veritas, ending 54 years on LSE
- Rival bidder CVC could still return with a higher offer
- Latest in a wave of foreign takeovers of London-listed industrial firms
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Advocates of stronger scrutiny argue that the steady loss of FTSE 250 industrials to overseas private equity should worry policymakers, not be waved through. Bodycote's expertise in metallurgy and heat treatment feeds strategically important supply chains such as aerospace and defence, and each departure like this, following Gamma Communications and Capricorn, thins out Britain's listed industrial base and shifts key decisions, jobs and tax revenue abroad. They contend that private equity ownership often brings heavier debt loads and a shorter-term focus on returns than public markets allow, sitting awkwardly with a government that has publicly championed reindustrialisation, and that ministers' silence on this trend suggests a gap between stated ambition and actual policy attention.
The case against
Those more relaxed about the deal see it as capital markets functioning as intended: Bodycote's board and shareholders are free to accept an offer they judge fair, and the presence of a rival European bidder in CVC, alongside Apollo's earlier interest, shows genuine price competition rather than a distress sale. They point out that the 940p offer sits close to Bodycote's own ten-year earnings multiple, hardly evidence of assets being seized on the cheap, and argue that the underlying problem is London's persistent undervaluation of industrial companies relative to overseas markets, which is a structural issue for exchanges and pension investment rules to address rather than one for government to solve by blocking takeovers. On this view, open UK markets that welcome foreign capital, just as British investors buy assets abroad, remain a strength worth preserving, and new private owners can bring investment and management focus that benefit the business and its 4,000 employees rather than harm them.