Foreign investors go bargain-hunting as pound hits record lows

What is it about French tycoons and British phone companies? While Patrick Drahi lays siege to BT, another “French rebel”, Xavier Niel, has begun storming the ramparts of Vodafone, said Jamie Nimmo in The Sunday Times. Niel has built a 2.5% stake worth £750m in the UK mobile phone giant via his Atlas Investissement vehicle.

The founder of the Iliad telecoms empire is something of a celebrity entrepreneur in France, his profile raised by his long-term relationship with the heiress to the LVMH fortune, Delphine Arnault. Niel’s exact plan for Vodafone is anyone’s guess. He has left the market, and the company’s top brass, guessing.

“Brexit was supposed to awaken a latent buccaneering spirit,” said Tom Braithwaite in the Financial Times. “And so it has. For the French.” The Iliad/Vodafone tilt is just one of “a flurry of cross-Channel deals” struck on a single day last week, involving tech, satellite and recycling companies. Is this some kind of “dastardly” French plot? Bankers point instead to the relative decline in valuations and currency. Prepare for a rash of American companies to join the French “at the UK’s bargain bin”.

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“Even before sterling got this low, foreign corporate and buyout bidders were taking advantage of relative dollar strength to pounce on London-listed companies,” said Chris Hughes on Bloomberg. Thanks to Liz Truss and Kwasi Kwarteng, this “UK is cheap” narrative has “gotten another leg”.

Analysts at Canaccord Genuity recently drew up a list of 100 companies it considers to be targets – including ITV, Next, Greggs, BAE Systems, Flutter and The Week’s publisher, Future, said Ben Marlow in The Daily Telegraph. The most “vulnerable” are the “cheap and cash rich”. The “rock bottom pound” has turned some of our best companies into “sitting ducks”.