The London Stock Exchange is facing “material depopulation” following a boom in the M&A landscape dominated by overseas buyers, a top investment bank has warned.
Some 42 bids for London-listed firms are currently ongoing with a total market capitalisation of £74bn, according to a new note from Peel Hunt. The figure is more than double the £35bn from the entirety of 2025 across 40 bids.
Overseas bidders make up 64 per cent of the 2026 figures, broadly flat with the previous year.
But the buoyant deals market has come amid a “dearth of IPOs”. Since the start of 2023 there have been 166 bids for firms with a price tag over £100m with the collective value topping £180bn. This is compared to just 11 IPOs above £100 for a total value of £6bn.
“To say that the UK has a problem retaining its companies and listing new ones would be a massive understatement,” said Charles Hall, head of research at Peel Hunt.
He added the number and value of bids for UK firms were running at “exceptionally high levels, raising concerns that the UK equity market is seeing a material depopulation”.
Airtel Money completed its IPO on the London market last week with a valuation of £5.3bn, marking the biggest listing in five years. It marked the first time since 2021 that the London Stock Exchange landed an IPO north of £1bn.
The City has struggled to compete with the lure of US markets and lost some of its top talent to exchanges across the Atlantic. Money transfer firm Wise downgraded its London listing in favour of New York last year in a major hit to the City bourse.
Since 2023, seven UK giants have shifted their listings, blowing a £120bn hole in the London market. In the same period, seven UK-based firms have also opted to IPO overseas.
“The pace of delistings vs listings in the UK is widening,” one banker told City AM, adding the European markets were “massively lagging the US”.
Calls for government intervention
London AI infrastructure firm Nscale filed for a US listing targeting a $35bn valuation earlier this year, pouring cold water on hopes from stock exchange officials and ministers of attracting high-growth tech talent.
Hall suggested a series of intervention measures to boost equity markets, including shaking up the capital gains regime for domestic and overseas investors and fast-tracking index inclusion.
“The good news is that turbocharging UK equity markets is not difficult and can be done at pace,” he said.
City minister Lucy Rigby told City AM that capital markets reform was “not a job done” and the government was “continually looking for ways that we can ensure we’re being as competitive as possible”.
Hall pointed to ditching stamp duty on shares as a key lever to “remove friction and enhance UK competitiveness,” adding it makes “no sense for a UK investor to have a higher transaction cost for buying shares in a UK company than a US business”.
In the 2025 Budget, then-Chancellor Rachel Reeves launched a stamp duty holiday, removing the 0.5 per cent levy on UK stocks for newly-listed companies in their first three years of trading.
But the move has failed to open the floodgates for listings. Thought Machine chief Paul Taylor told City AM the levy is “anachronistic” and the recent reforms were not “big enough to really change anybody’s mind either for or against”.