# The slow death of the UK equity market

_Foreign bidders are picking off UK-listed companies at a decade-high pace, drawn by a valuation discount manufactured by FRS17 and MIFID 2. The consequences for the UK economy are more serious than policymakers seem to grasp._

Neil Woodford · 25 May 2026 · 1 min read

![The slow death of the UK equity market](https://cdn.sanity.io/images/v3acfbvo/production/734f7129cb1397dc1879775ceec14b3a3cbb41ec-1536x1024.jpg?w=1600&fit=max&auto=format)

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While the world's financial media has been obsessing about the war in the Persian Gulf, the AI boom and Trump's China visit, another significant story has been unfolding in the UK equity market that has received very little attention. Quietly, the slow death of the UK equity market has accelerated, with the number of deals in which leading UK companies are being acquired by foreign bidders picking up significantly. The feeding frenzy has been catalysed by the deep valuation discount that has been a dominant feature of the UK equity market for years.

That discount has not always been a feature. It was created by a succession of poorly thought-through reforms. FRS17 triggered a prolonged and damaging exodus by UK defined-benefit pension funds from UK equities. MIFID 2 then dismantled the broking infrastructure that listed small and midcap companies relied on, by rendering it uneconomic.

Unsurprisingly, the discount is now attracting foreign buyers. They are working through UK listed assets at a pace not seen for years. So far in 2026, a string of high-profile companies has sold out to foreign bidders, including Schroders, Beazley, Intertek and Tate & Lyle. Bid rumours currently surround Legal & General and Hiscox. The value of M&A activity targeting UK companies is at a decade high.

Some will see this as good news, but there is a more worrying consequence. A shrinking market with fewer scaled listed businesses, and one that is not attracting sufficient domestic institutional capital, eventually becomes a market that cannot properly fulfil its vital functions for the economy. Policymakers and regulators should be very concerned about this trend and the corresponding trickle of UK companies wanting to IPO in the UK. This problem should be right at the top of the government's priorities. The reality, sadly, is that I suspect not one member of Starmer's cabinet is even aware that this is an issue.

_P.S. in the space of 25 or so years the number of companies listed on the UK equity market has more than halved. It now stands at just over 1,500._