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- 📈 Shawbrook’s £2bn Leap: London Awaits
📈 Shawbrook’s £2bn Leap: London Awaits
UK Firms Juggle Taxes, Costs, and Confidence
This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes
In today’s stories:
Shawbrook’s £2bn Leap: London Awaits
UK Firms Juggle Taxes, Costs, and Confidence
M&A Boom: Britain’s Assets Attract Foreign Eyes
The summary: Shawbrook's potential £2bn flotation could spark new life into London's listing scene, showcasing resilience and growth in the UK banking sector despite global market pressures.
The details:
Shawbrook Group's owners, BC Partners and Pollen Street Capital, are plotting a bold return to the London Stock Exchange with a £2bn flotation, potentially under Goldman Sachs' guidance, aiming to inject life into London's sluggish listings scene.
With Barclays likely to join the ranks, this ambitious move might place Shawbrook among the top London listings of 2025, though the final nod hinges on market conditions and investor appetite.
Shawbrook, a specialist lender with 1,600 staff and 550,000 customers, has been a key player in the mid-tier banking sector since its 2011 inception, despite past takeover flirtations with Metro Bank and Co-operative Bank falling through.
CEO Marcelino Castrillo touts robust growth and expansion prospects, buoyed by a stabilizing economic landscape and rising customer confidence, as Shawbrook gears up for potential consolidation plays and strategic growth.
Why it matters: Shawbrook’s potential flotation could jolt London’s sleepy stock market awake, signalling a revival of confidence in British public listings amidst global competition. It’s a reminder that despite the allure of New York, there’s still life—and value—to be found in the City’s financial ecosystem. Plus, watching a mid-sized lender like Shawbrook navigate these choppy waters offers a glimpse into the shifting dynamics of the UK’s banking sector.
The summary: Despite rising costs, tax hikes, and a wobbly economy, UK businesses are determined to stay resilient, balancing challenges with a stiff upper lip and a dash of optimism.
The details:
Over half of UK businesses plan price hikes in the next three months, as rising costs and taxes create a "pressure cooker" environment, according to the British Chambers of Commerce (BCC).
Confidence among firms has plummeted to a two-year low, with 63% worried about taxes after a Budget that hiked national insurance contributions, sparking fears of job cuts and inflationary pressures.
Despite grim economic figures showing zero growth and a brief contraction, KPMG predicts a brighter 2025 with 1.7% growth, driven by increased consumer spending and wage boosts—though not without inflation risks.
Business leaders express mixed feelings: Kevin McNamee of Denroy Group laments the "pockets picked" by tax rises, while Dame Irene Hays of Hays Travel remains upbeat, navigating rising costs with seasoned resilience.
Why it matters: Businesses are bracing for a financial squeeze, juggling rising costs and taxes like an overworked circus act, which could send prices skyward just as everyone’s trying to make ends meet. The nation’s economic pulse seems a bit faint, with sluggish growth and inflation lurking, potentially making your morning cuppa even more of a luxury. Meanwhile, company chiefs are either tightening belts or channeling their inner stoics, proving that in the UK, keeping calm and carrying on isn’t just a slogan—it’s a survival tactic.
The summary: As the City’s dealmakers juggle non-stop M&A action, holiday interruptions, and tech-driven changes, it’s clear that the corporate world is in full throttle, with opportunities and challenges flying fast and furious!
The details:
Relentless Workload: Lawyers are trading poolside for paperwork, enduring 14-hour days during holidays to keep up with the insatiable demands of deal-hungry executives, even as they juggle jet-setting vacations.
Market Madness: The UK's M&A scene is rebounding, with foreign investors eyeing British assets, pushing 2024 deal values up 51% from the previous year, and turning the City into a hotbed of corporate wheeling and dealing.
Strategic Shifts: Companies are carving out unprofitable divisions under pressure from activist investors, with high-profile examples like Unilever's ice-cream spin-off and Smith & Nephew’s division break-ups sparking interest.
Tech and Taxes: The M&A industry is debating AI's role in dealmaking while tax changes are prompting family business sales. Meanwhile, Trump’s policies and the “friend-shoring” trend are set to reshape the corporate landscape.
Why it matters: The unrelenting pace of M&A activity underscores the ever-present tug-of-war between holiday bliss and boardroom battles, leaving lawyers glued to their screens even in paradise. With foreign investors swooping in and activist pressures mounting, the corporate chessboard is in constant flux, making every company a potential pawn or prize. As tech transforms the industry and tax tweaks spark a flurry of sales, the stakes are sky-high, ensuring no corner of the City sleeps soundly.
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