In a recent article in the Spectator entitled ‘Brexit Bargains’, Matthew Lynn gave us a glimpse of what Brexit really means to the global liberals of the modern Conservative party.
The good news, Lynn argues, is that the current spate of foreign takeover bids – he cites the Hong Kong Stock Exchange’s £30 billion bid for its London rival, the American ‘buy-out’ firm Advent’s £4 billion bid for Cobham, the high tech defence supplier, and Li Ka-shing’s purchase of the pub chain Greene King – proves that our economy is flourishing. The UK has ‘lots of businesses with a secure niche in a global market’; because the pound is low and the UK stock market undervalued (Brexit uncertainty), you can buy a successful company here cheaper than anywhere else in the world; and, best of all, you can buy it up ‘without having to face the kind of political opposition you would in France, Germany, Japan … or the US’.
True, Lynn goes on, some of us ‘might even be sad to see [these companies] fall into foreign hands’; true, he might have added, firms under foreign ownership see their profits and dividends flow overseas, their investment decisions taken to serve foreign interests, their assets stripped and risky long-term investments shut down to boost short-run profits and dividends; true, domestic investment in plant and machinery, in research and development, in skills training – in all that contributes to productivity – are liable to be severely curtailed; true, the flogging off of assets vital to our strategic national interest – GKN to Melrose, British Steel to the Turkish armed forces pension fund, and now Cobham to Advent – makes a mockery of claims that through Brexit we will regain our independence; but, Lynn reassures us, the wave of takeovers that is likely in the months ahead ‘will keep the stock market buoyant’. And this is all that matters.
In this spirit, Lynn gives would-be-foreign-investors some useful advice concerning where to look for bargains: Pearson, the education business, is surely ripe for takeover, as are Reckitt Benckiser, the health and hygiene goods manufacturer (Dettol, Strepsils and Airwick are among its products), Ocado, and the pharmaceuticals giant AstraZeneca. The media and financial service sectors are rich for pickings, as are our high-tech companies.
Global post-Brexit Britain, then, will be dynamic and outward looking, open to all who would come here to contribute their skills, their entrepreneurial talent or their money. It will be a magnet for foreign investors – i.e. for corporate buyers and private equity firms. But above all, it will be good for those who benefit from a buoyant stock market, from takeovers and mergers, and from the profits and dividends of private equity firms.
Now, who might these people be?
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