ITV Tops European M&A Target List, Ending Smith & Nephew’s Reign

U.K. broadcaster ITV Plc topped the list of European acquisition targets for 2017 in a Bloomberg survey of traders, analysts and fund managers, knocking off medical-device maker Smith & Nephew Plc from the spot.

ITV’s largest shareholder, U.S. cable company Liberty Global Inc., recently signaled interest in buying assets in Europe. Shares of the London-listed firm, which ranked second in 2016, have fallen 27 percent in local currency since reaching a record in July 2015, or 41 percent in dollar terms. Last year, it withdrew an offer to buy production company Entertainment One Ltd.

Cigarette maker Imperial Brands Plc came in a close second this year, amid speculation that British American Tobacco Plc’s plans to buy Reynolds American Inc. will spur a wave of consolidation for the industry. Smith & Nephew, which topped the list for the past two years, fell to third place, tied with five other companies, according to the survey of 24 event-driven desks.

Also slipping down the ranks was 2014’s winner Vodafone Group Plc, with only two mentions. Chief Executive Officer Vittorio Colao said in November that regulators could look favorably on any broader combination with Liberty Global in Europe, after their approval of a joint venture in the Netherlands. Vodafone is in talks to merge its Indian unit -- a business that it wrote down by more than $5 billion last year -- with Idea Cellular Ltd.

Survey participants named 118 companies as possible targets, including AstraZeneca Plc and Burberry Group Plc in the U.K., Havas SA and SFR Group SA in France and Switzerland’s Clariant AG.

Click here for the complete survey results.

With about $137 billion worth of transactions announced so far this year, M&A activity in Europe is off to its strongest start in 17 years, according to a Morgan Stanley note dated Jan. 27.

Several stocks included in last year’s predictions have since been acquired or are in merger talks. These include:

  • ARM Holdings Plc
  • BAT
  • Home Retail Group Plc
  • ICAP Plc
  • Meda AB
  • Parmalat SpA
  • Premier Farnell Plc
  • Zodiac Aerospace SA
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