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IT SEEMS as if every week brings fresh evidence that American investors value British firms more highly than their domestic counterparts do. Some firms are choosing to float outside London. Others are being snapped up by canny international predators.

While policymakers wrestle with this problem, there are occasional benefits for British shareholders. In the past fortnight alone, two recent Midas recommendations have received takeover bids from overseas bargain-hunters.

Last week, specialist delivery firm DX Group admitted to a 48.5p a share approach from private equity outfit HIG, a deal that has already been accepted by several large shareholders.

Just days earlier, royalties firm Round Hill Music succumbed to a £376 million bid from Nashville-based music giant Concord. Midas tipped DX at 32p in July and the shares closed at 43.5p last week, below HIG’s offer price.

Round Hill, tipped at 63p in June, rose to 90.5p after the board advised shareholders to accept the Concord offer. That deal is now almost certain to go through, handing investors who bought in June a handsome windfall.

The DX bid is slightly less certain. HIG has until October 9 to make a firm offer, and it may walk away before then. But other bidders could emerge, as DX fans believe the stock is worth at least 50p.

Nervous investors may want to pocket their 32 per cent gain now. Others should hold on and see how this party unfolds.

Wealth & Personal Finance




dmg media (UK)