5 things you need to know about … trends impacting UK public markets in 2022

2021 has been an exceptional year for the London Corporate team at White & Case, with a strong performance across the practice, including White & Case advising on nearly 50 deals involving publicly listed companies in the UK with a value of over £55 billion. Our unique insight across a broad range of investors, companies and sectors in the London market has allowed us to provide innovative advice to our clients on complex and cutting-edge deals.

We are looking forward to 2022, and here's what to expect:

One

M&A … the underlying fundamentals which drove global M&A to record highs in 2021 continue to apply and we expect to see more M&A in 2022. The SPAC boom has added to the already significant accumulation of capital that needs to be deployed, cheap debt is readily available, exchange rates are attractive and depressed valuations in the UK public markets have opened up pockets of value for investors. In addition, conglomerate break-ups are firmly back on the agenda and, with competition for assets increasing, the threat of interlopers is very real, even in the later stages of publicly announced transactions.

Two

Activism … retail and institutional shareholders found their voices in 2021, having seen the benefits of active shareholder engagement. After two years of COVID-related woes, they are now looking for action to be taken. Boards of companies with poorly communicated strategies, or companies which continue to trade at below pre-pandemic levels, can expect to be challenged. 2021 also saw an increase in shareholders opposing M&A and not just those with half an eye on a bump to the offer price. We expect this to continue as shareholders push boards to consider alternative options, including, in some cases, activist shareholders competing for control themselves.

Three

E(E)SG … it's been on the list for a while now but environmental, social and governance issues continue to attract attention globally and 2021 saw some significant steps being taken by shareholders to hold companies to account. The pandemic has also led to an increased focus on human capital management and employees (the new "E"). We expect this dimension to play into proxy contests going forward as shareholders consider a broader focus.

Four

Legislation … as the large global economies have implemented nationalistic policies, the UK has slowly followed suit. Over the last 12 months there has been a marked increase in the level of scrutiny of foreign direct investment in the UK with a focus, in particular, on tech innovation companies. Meanwhile, sweeping changes are being proposed to the listing regimes aimed at encouraging companies to stay with or list in London, a market still dominated by "old economy" companies such as banks and mining companies. Further changes to legislation to encourage and retain innovative companies in the UK are to be expected.

Five 

Turning again to Michel de Nostredame (Nostradamus), the infamous French Astrologer, for his predictions for the new year … 2022 is set to be another busy year. Having survived the zombie apocalypse predicted for 2021, some of his followers are forecasting the rise of artificial intelligence in 2022. Whilst it would be nice to think he was predicting improvements in smart technology, Nostradamus’ "bodies in the fire" quatrain brings to mind images of Schwarzenegger's Terminator (and not the good one). Hopefully he was just going for dramatic effect.

With close to 600 M&A lawyers around the world, White & Case is an M&A powerhouse and one of the most active M&A practices among global law firms – ranked among the top 3 firms for global M&A by deal value for 2016-2020. We are equally adept at advising on big ticket, complex M&A deals as well as on mid-sized and smaller deals for strategic clients in EMEA and the rest of the world. Led by M&A heavy hitters, with a deep bench of public M&A and PE specialists with an established record advising targets and bidders on takeover offers and schemes. We also have extensive experience advising on strategic acquisitions of significant minority stakes and hostile takeovers, and market-leading debt and equity capital markets capabilities. We provide expert advice to help navigate complex situations, offering innovative financing solutions for both bidders and targets (including advice on PIPEs, high yield and structured finance).

Jade Jack (Knowledge Manager, White & Case) co-authored this publication.

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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