Standard life rejects takeover of Tomkins
Standard Life, one of the largest investors in the UK stock market, has this week rejected a £2.9 billion takeover offer for engineering conglomerate Tomkins. While the indicated offer, from a Canadian consortium, was well above the Tomkins share price at the time there are growing fears that overseas investors are using a weakness in the UK exchange rate and a weakness in the UK stock market to "grab UK assets on the cheap".
Whether or not Standard Life can summon enough support to block the proposed takeover of Tomkins remains to be seen because at the end of the day money talks and with the UK economy forecast to take a downturn in the second half of 2010, maybe cash is king?
However, there is a growing problem with regards to overseas bidders using the weakness in sterling to grab perceived bargains in the short term. Unfortunately, this is a situation which is unlikely to change in the short to medium term and indeed with the UK economy effectively a "free market" there is little that the UK government and UK authorities can complain about. Historically we have seen UK companies using similar situations overseas to grab their own bargains so now that the tables have turned is it right for the UK authorities and UK investors to complain?
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