Is the UK now a target for overseas investors?
Over the last two years we have seen a significant reduction in various exchange rates against sterling which has caused some problems in the UK. The importing of goods is now more expensive than it has been for some time although on the positive side we have seen an increase, albeit less than expected, in exports. However, is the UK now becoming a target for overseas investors?
Over the last 12 months we have seen a number of high-profile takeover bids from overseas companies, with Cadbury one of the more prominent names in the headlines, and only this weekend we saw that a US private equity company would appear to be targeting the UK building society sector. We are now in a very difficult situation for the UK business arena with many companies, suffering potential short-term issues, now appearing on the radar of many overseas investors. While the situation regarding BP, and rumoured potential interest from ExxonMobil, is a slightly different situation it does illustrate how a reduction in the relative value of sterling against other currencies has been turned into a positive by overseas investors.
While the UK government would ideally like to protect UK companies from opportunistic bids from overseas, the truth is that we operate in a free market and any company is free to make any offer for the shares of a third party.
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