Takeover Readiness: What UK CEOs Must Prepare For in 2026
UK CEOs must prepare for takeover approaches now, not after one lands, as overseas buyers target cash-generative British assets in a market Citi’s UK chief executive Tiina Lee has called “on fire.”
Under the UK Takeover Code, administered by the Panel on Takeovers and Mergers, a target company’s board has strict, fast-moving obligations once an approach becomes public — obligations that are far easier to meet if the groundwork has already been done.
Why Is UK M&A “On Fire” in 2026?
EY’s UK CEO Outlook 2026 survey finds that 87% of UK CEOs expect their organisation’s appetite for M&A to increase over the next 12 months, with 69% actively pursuing deals and 63% also exploring strategic alliances. Much of that activity is outbound: UK companies buying to accelerate AI-driven transformation and long-term growth. But Lee’s commentary points to the other side of the same trend — large-cap companies simplifying their portfolios through disposals, which makes the remaining core business leaner, more focused, and often more attractive to an acquirer.
EY also finds that 74% of UK CEOs plan to increase AI investment in 2026 compared with 2025, which helps explain why buyers are increasingly targeting bolt-on AI capability through acquisition rather than building it organically — and why any company with relevant AI assets can suddenly become an attractive target.
That combination — active UK buyers and increasingly focused, cash-generative UK targets — is why boards that have never seriously considered an inbound approach should now.
Executive Action:
- Ask the board this quarter whether the company’s current profile makes it a plausible takeover target.
- Commission an independent view of the company’s standalone value versus its value to a strategic acquirer.
What Should CEOs Do Before an Approach Lands?
Once an approach is made public, the Takeover Code’s timetable moves in weeks, not months — there is little time to assemble data, align the board, or agree a defence strategy from scratch. CEOs who prepare in advance typically maintain a standing due diligence data room, a pre-agreed engagement protocol for unsolicited approaches, and clarity on which advisers would be instructed and how quickly.
Preparation also means understanding the shareholder register well enough to anticipate how different investors might react to a bid, rather than discovering shareholder sentiment for the first time mid-process. Boards that have not yet mapped which parts of the business would be most attractive to a strategic acquirer are, in effect, deciding not to prepare.
Executive Action:
- Maintain a standing due diligence data room covering financial, legal and operational information.
- Agree in advance which advisers the company would instruct if an approach were received.
- Review the shareholder register at least twice a year to understand likely reactions to a bid.
How Does the Takeover Code Constrain the Board’s Response?
The Takeover Code requires target boards to act in the interests of shareholders as a whole and prohibits frustrating action — such as issuing new shares or entering material contracts designed to block a bid — without shareholder approval once an approach is likely. Directors’ duties under the Companies Act 2006 continue to apply throughout, meaning the board must be able to demonstrate it considered the offer on its merits rather than defending management’s own position.
This is precisely where CEOs should brief the board using INFORMD’s capital approval assessment template to frame how any competing use of capital — a counter-investment, a special dividend, an alternative deal — would be evaluated against an approach, and our executive self-assessment tools to pressure-test board readiness now, while there is no live approach to manage.
Executive Action:
- Brief the board on Takeover Code restrictions on frustrating action before any approach arrives.
- Agree a protocol for how the board will evaluate an offer against standalone strategic alternatives.
What Must CEOs Brief the Board on Now?
The single most valuable thing a CEO can do this quarter is put takeover readiness on the board agenda as a distinct, standing item — not folded into a broader risk report where it goes untested until an approach actually arrives. That means a clear view of who leads the response, what the company’s public defence narrative would be, and how quickly the organisation can mobilise.
Executive Action:
- Add takeover readiness as a standing agenda item at the next board meeting.
- Name the internal lead who would coordinate the company’s response to an unsolicited approach.
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Large-cap UK companies are simplifying through disposals, making remaining businesses leaner and more cash-generative, while overseas buyers are actively targeting these more focused British assets amid what Citi’s UK CEO has called an “on fire” M&A market.
Maintain a standing due diligence data room, pre-agree which advisers would be instructed, and review the shareholder register regularly so the board understands likely investor reactions before any bid is received.
Target boards cannot take frustrating action — such as issuing new shares or entering material contracts designed to block a bid — without shareholder approval once an approach is likely, and must act in shareholders’ collective interest.
At least twice a year as a standing agenda item, with a named internal lead identified in advance, rather than being addressed only after an approach has already been received.
