Something is very wrong with either the stock market or private-equity spreadsheets when two major buyout firms are competing to buy a UK company for more than double its market value. KKR & Co. and Advent International may have forced each other higher in the auction for London-listed engineer Spectris Plc. But the high takeover premiums they’ve dangled simply reflect the difference between what companies like this can achieve under public versus private ownership. It’s a serious problem.
Spectris is a classic target for a buyout — one of those unloved British companies that’s essentially international when you look at where its sales come from. The company’s share price halved from December 2023 through April this year on various disappointments, driving its market cap down to around £2 billion ($2.7 billion). Earnings are in a cyclical trough, and the valuation likely suffers a conglomerate discount since the business serves unrelated industries, including autos and health care.