A lack of public-to-private acquisitions in the first six months of 2006 has hit the UK buyout market, with figures falling from €19bn in the first half of 2005 to €15bn (US$19.2bn to US$24.3bn) in the same period this year, according to research by Centre for Management Buyout Research (CMBOR).
By contrast, the Continental European buyout market reached €55.3bn in the first half of 2006, up 70% on the comparable period of last year. The rise in secondary buyouts on the Continent as corporates continued their restructuring programmes had benefited the European private equity market, added the report.
Tom Lamb, co-head of Barclays Private Equity, which sponsors CMBOR alongside Deloitte, said in the report that the Continental European buyout market had benefited from an increase in public-to-private buyouts, reaching €23.5bn compared with €8.2bn in the first half of 2005.
“This contrasts sharply with the UK, where public-to-privates have dried up, due to public company shareholders proving to be incredibly resilient to private equity advances,” said Lamb.
The latest report reiterates concerns voiced by CMBOR in March that the increasing number of public shareholders rejecting bids by private equity firms had led to the UK buyout market getting off to a slow start in 2006. At the time of the March report, the UK buyout market had reached only £3.1bn of deals.
Abandoned public-to-private bids by private equity firms this year have included attempts to buy HMV, the music and entertainment retailer; hotel group De Vere; UK homes builder McCarthy & Stone; and, according to reports, Kesa Electricals, a UK electrical retailer.