The London Stock Exchange has seen another of its companies pass into overseas hands, as pension insurance provider Just Group accepted a substantial takeover offer from Canadian firm Brookfield Wealth Solutions (BWS) on Thursday.
Just Group's board announced to the market that it had agreed to a £2.4bn bid from the North American asset manager, representing a hefty 70 per cent premium over Just's closing share price the previous day, as reported by .
This latest acquisition marks another setback for the London Stock Exchange, which is engaged in an ongoing struggle to attract and retain top Ƶ firms.
In recent developments, fintech standout Wise secured overwhelming shareholder approval to transfer its primary listing to New York, with its founder citing the benefits of deeper liquidity and increased visibility in the US market. Additionally, speculation persists that Astrazeneca, London's largest listed company, is contemplating a similar move to bolster political support in its largest market.
At the same time, numerous potential IPO candidates, whose listings could invigorate the Ƶ's financial markets, are delaying their public debuts amid the current volatile economic and geopolitical landscape.
Charles Hall, Peel Hunt's head of research, commented to City AM that the significant premium offered in the deal is "yet another example of the undervaluation of the Ƶ market, which is of clear interest to both overseas companies and private equity."
He continued: "The scale of departures from the London market is highly concerning. We expect the rate of IPOs to increase, but we need to see structural change to ensure the Ƶ remains a leading equity market."
Just Group takeover a signal of BWS's Ƶ ambitions
BWS's acquisition of Just marks the company's maiden foray into Britain's pension insurance sector.
The firm had previously telegraphed its plans to break into this market following its separation from parent company Brookfield to become a standalone entity focused on insurance.
BWS will join a select group of overseas players in a sector largely controlled by major British insurers such as Phoenix, Legal and General, and Aviva.
BWS boss Sachan Shah described the transaction as evidence of the emerging company's "ambitions in the Ƶ", which it has identified as a crucial territory given its "status as one of the world's preeminent pensions market."
He remarked: "We look forward to supporting Just's growth in the Ƶ, building on its commitment to providing financial certainty and excellent service to its policyholders."
Shah added: "We own and operate insurance companies built for long-term success, supported by high quality assets, and are committed to providing ironclad retirement security products."
Just Group's investors will pocket 220p per share, representing approximately a 75 per cent premium above its average share price over the preceding two months. The board of the company expressed that the substantial premium offered represents "fair value" to the group's investors, providing them with an immediate financial reward for the long-term strategy in place.
"The Just Board is pleased to recommend the acquisition by BWS, which delivers certain value for shareholders at an attractive cash premium," stated Just chair, John Hastings-Bass. "The acquisition reflects the strength of Just's business and the significant financial and strategic progress the Just management team, led by David Richardson, has delivered in recent years."
