Foreign firms prepare to swoop on British targets

(Bloomberg)

Foreign companies have stepped up their interest in acquisition targets in the UK despite an official review of takeover policy following the controversial purchase of Cadbury by America's Kraft earlier this year.

Data released today shows that overseas takeovers of British companies are now at their highest level for two years – and that 51 per cent of bids for British companies this year have come from foreign buyers.

The figures, compiled by Wedlake Bell, the City law firm, show that figure rose to 58 per cent during the third quarter of the year.

The US continues to account for the lion's share of such bids, but British companies are attracting interest from all over the world, with businesses based in the Bric economies – Brazil, Russia, India and China – responsible for an increasing number of offers.

The data will come as a disappointment to those who had hoped an overhaul of Britain's takeover rules following the Cadbury saga, which saw campaigners mount a spirited but ultimately unsuccessful attempt to prevent the confectioner falling into the hands of Kraft, would discourage foreign companies from making acquisitions in the UK.

In fact, the new rules proposed by the Takeover Panel are not specifically aimed at foreign buyers, though they do afford companies some protection from shareholders taking stakes simply to speculate on M&A activity. The Panel has also suggested that a buyer making a commitment about the location of staff or operations should have to keep that promise for at least a year.

Vince Cable, the Business Secretary, has backed the overhaul of takeover rules, while making it clear that he does not believe British companies should be protected from foreign buyers.