The Takeover Epidemic: Has the Investor Relations dynamic done enough to protect listed companies?

The Takeover Epidemic: Has the Investor Relations dynamic done enough to protect listed companies?

The consequences for traditional IR and Corporate Affairs roles

 

The Takeover Epidemic: Has the Investor Relations dynamic done enough to protect listed companies?

The consequences for traditional IR and Corporate Affairs roles

 

Something profound is happening to the listed company market. Across the UK and the United States and many parts of Europe, public companies are being acquired, taken private, broken up or forced to defend themselves against increasingly sophisticated buyers and activists. Private equity has substantial pools of capital to deploy; strategic buyers are searching for growth; activists are looking for weaknesses. Meanwhile, boards face relentless pressure to demonstrate that remaining independent will create more value for shareholders than accepting the cheque sitting on the table.

Outstanding IR cannot make a company takeover-proof. Industrial logic, attractive premiums and inevitable consolidation can prevail regardless. But many sound businesses remain misunderstood, undervalued or invisible to global investors for years, sometimes without genuinely senior IR leadership. Then, when somebody else recognises the value that the public market has failed to recognise, everybody acts surprised.

The valuation gap is an invitation

Every CEO and chairman of a listed company should understand one uncomfortable truth: a persistent valuation discount is not simply an investor-relations problem. It is a corporate vulnerability. If management believes a company is worth £5 billion but the market values it at £3 billion, a buyer may offer £4 billion, reward shareholders with a premium and acquire value the market missed. But that sequence of events leaves a much more important question unanswered: why was the company worth only £3 billion in the public market in the first place?

This is where Investor Relations enters the debate. Traditional IR activities: results, roadshows, meetings, consensus and analyst engagement remain essential but are no longer enough. In The Global Investor Relations Revolution, we argued that the best IROs are no longer simply communicators. They have become part of the strategic machinery of the organisation and, at their best, are actively involved in shaping decisions. The book describes the strongest IROs as “essential to the machinery of strategic decision making.” That is precisely where IR now needs to be, because modern Investor Relations should concern itself with something much larger than disclosure and corporate access. It should play a central role in the strategic defence of valuation.

World-class IR requires investment

There is, however, an uncomfortable truth that the IR profession cannot solve by itself: senior management has to invest in it. CEOs cannot complain of misunderstanding while underfunding IR; CFOs cannot lament valuation while appointing leaders too junior to challenge them; boards cannot expect shareholder intelligence without giving IR resources and strategic access. This is not simply a question of budget. It is about status, access, talent, technology, data, research, shareholder intelligence and, above all, seniority.

Investors are supposedly central stakeholders, yet the executives managing those relationships are too often treated as second-tier. If capital markets matter, IR must matter. In The Global Investor Relations Revolution, the argument is made that the development of IR requires not merely an improvement in capability but a “step-change” in strategic outlook and value creation. Senior management has to enable that change. Companies cannot demand world-class Investor Relations while funding second-class Investor Relations.

A takeover rarely begins with the bid

One of the most persistent misconceptions about takeovers is that the battle begins when an approach arrives. In reality, much of it may already have been lost by then. Vulnerability builds gradually: institutions exit, analyst coverage declines, guidance is missed, credibility erodes and a persistent valuation discount becomes normal. None of these developments necessarily produces an immediate crisis. Collectively, however, they can create the conditions in which a company becomes vulnerable.

Buyers analyse ownership, break-up values, dissatisfied investors, management credibility and capital allocation, looking for assets to restructure or sell. In other words, outsiders conduct sophisticated assessments of corporate vulnerability. The obvious question is why the company’s own IR function should not be conducting the same assessment first.

IR as an early-warning system

This is where the evolution of the profession becomes particularly important. As Nathalie Megann, President and CEO of the Canadian Investor Relations Institute, told us in The Global Investor Relations Revolution, Investor Relations has moved “from a reactive role to a proactive one.” If IR is proactive, takeover vulnerability must be monitored continuously, not discovered when a bid arrives.

A senior IRO should warn boards about dangerous valuation discounts, weakening long-only ownership, frustrated shareholders, questionable strategy, potential disposals and event-driven investors. Most importantly, the IRO should be able to tell the board whether shareholders would actually support management if the company’s independence were tested. Imagine the value of a Head of IR being able to tell the board: “If somebody offered our shareholders a 30 per cent premium tomorrow, I am not convinced enough of them would support our independence.” That is not investor communications. It is strategic intelligence.

The case for a Capital Markets Vulnerability Audit

Every listed company should consider a regular Capital Markets Vulnerability Audit: a rigorous review of valuation, ownership and strategic perception rather than a reactive takeover-defence exercise. Why does the company trade at a discount? How much reflects operating performance, weak communication or investor scepticism? Who supports the strategy, who would sell at a premium, who should own the shares but does not, and why have investors exited?

Viewed as an outsider, what would an activist criticise, what might private equity change, what could a buyer pay, and can management justify independence? If a company cannot answer these questions before receiving a takeover approach, it will be forced to answer them under enormous pressure afterwards.

Strong IR can reduce corporate vulnerability

There is evidence to support the broader argument. One of the more striking findings highlighted in The Global Investor Relations Revolution concerns shareholder activism. Research cited in the book found that strong IR can have a stabilising effect on activism and that this effect increases with the tenure of the IRO. The book’s conclusion was striking: “Experienced IROs provably head off shareholder activism.” Senior IR can identify shareholder dissatisfaction early and strengthen management’s understanding of investor expectations; it is an investment in strategic intelligence, not merely communications. Those relationships also reveal what shareholders actually believe, rather than what management hopes they believe.

The shareholder register is strategic architecture

A shareholder register should therefore never be regarded merely as an administrative list. It is part of the strategic architecture of a listed company. Management must understand why investors own its shares: conviction, benchmarks, cheap valuation or support for a break-up. Which would back independence, and which would sell? Just as importantly, management should know which investors should own the company but currently do not. This becomes more significant as passive capital continues to grow and traditional sell-side intermediation becomes less dominant. Matthew Johnson, Group Communications Director, IR & CEO Office at Vodafone, argued in The Global Investor Relations Revolution that IR increasingly needs to understand who shareholders and targets actually are and “own” the corporate-access function. Owning corporate access, however, should be only the beginning. IR should increasingly own shareholder intelligence.

Stop measuring activity and start measuring impact

This requires the IR profession to reconsider how it defines success. A company can hold 500 meetings, attend every conference and publish excellent materials while remaining persistently undervalued. Activity does not necessarily equal impact.

Measure outcomes: better ownership, international reach, investor conviction, management credibility, a narrower valuation gap and clearer understanding of investor objections. Above all, does the public market understand the value of the company before somebody arrives offering to buy it? That is a considerably more demanding test of Investor Relations than the number of roadshows completed or meetings held.

Global companies require global IR

The issue is particularly relevant in the UK, where too many listed companies remain under-marketed internationally. A globally competitive business can generate most revenues overseas yet still market its shares to an unnecessarily narrow investor audience. One of the central observations in The Global Investor Relations Revolution was deliberately simple: investors are global, markets are global and companies are global. Investor Relations must therefore be global too.

If a UK company merits comparison with US peers, American investors must understand it. IR should identify relevant institutions globally and why they do not own the shares. Senior management must then be prepared to invest in reaching them. A company cannot credibly complain that it is undervalued while refusing to invest sufficiently in addressing that undervaluation.

Seniority is no longer optional

This brings us to perhaps the most important organisational issue: listed companies need genuinely senior Investor Relations leaders. Senior IROs need command of valuation, strategy, governance, activism, capital allocation and shareholder behaviour. They must debate the investment case with investors and tell the CEO why it is failing. The second conversation may be the more important of the two.

Mediocre IR tells management what it wants to hear. Outstanding IR tells management what the market actually thinks. Doing that effectively requires confidence, judgement and organisational standing. Board access allows market intelligence to shape business assumptions and decisions. Strategic output cannot come from a function confined to tactical support.

Boards must be prepared to listen

Sometimes investors are right: IR cannot disguise poor execution or rescue an incoherent strategy through better messaging. When 25 sophisticated investors make the same criticism, management should consider whether the problem lies with the strategy rather than its explanation. The IRO’s responsibility is to bring that feedback into the boardroom without sanitising it. That requires a mature CEO and CFO, but it also requires an empowered and sufficiently senior Head of IR.

Think like the predator

Every listed-company board should undertake another exercise at least annually: ask its IR team, strategy function and advisers to analyse the business as though they were trying to acquire it. Where is hidden value? What might be sold, split or leveraged? Which shareholders are frustrated, and what premium would make them abandon independence? Then reverse the analysis and ask the question that matters most: what needs to change to make independence demonstrably more valuable? This is not traditional takeover defence. It is good corporate governance.

A test for the IR profession

The takeover wave tests whether companies truly accept IR as a strategic intelligence function rather than simply a reporting discipline. Boards must invest in senior IR talent, technology, shareholder intelligence and global targeting—and give leaders the authority to challenge management.

Fewer listed companies also threaten the profession itself. The long decline in US and London listings means fewer potential public-company IR mandates. Jamie Dimon, JPMorganChase chairman and CEO, put the issue starkly in his 2023 shareholder letter: “the total should have grown dramatically, not shrunk.” He was referring to the fall in US public companies from around 7,300 in 1996 to 4,300 at the time of his letter.

The Wall Street Journal reported in April 2025 that buyout firms held roughly 29,000 businesses worth $3.6 trillion, about half for five years or longer. Private ownership also faces difficult exits and capital recycling. The Wall Street Journal’s April 2025 headline, “Private Equity World Engulfed by Perfect Storm”, captures the other side of this transformation: a vast stock of portfolio companies that cannot all readily find buyers or return to public markets.

In March 2025, Handelsblatt’s Hannah Krolle, citing Bain, reported that private-equity exits rose 34 per cent in 2024 to $468 billion but remained below the five-year average, with around 29,000 portfolio companies awaiting exits. Handelsblatt also reported Artnet’s prospective Frankfurt delisting. Handelsblatt’s Hannah Krolle described the situation as “Private-Equity-Branche erholt sich nicht”,  the private-equity sector is not recovering. Her reporting, drawing on Bain’s research, makes clear that the exit backlog is global rather than confined to any one national exchange.

The Financial Times reported on 21 October 2026 that CVC was exploring an acquisition of Verisure, floated in Stockholm in October 2025, after its shares fell below the IPO price. The approach was preliminary, with no deal assured.  Harvard Business Review researchers Vijay Govindarajan, Shivaram Rajgopal, Anup Srivastava and Luminita Enache caution that fewer US listings also reflect changing business composition and listing economics; company counts are not the same as public-market value.  The Harvard Business Review researchers offered a different explanation: “the rising role of digital firms in the U.S. economy.” Their argument is a useful reminder that the number of public companies alone does not measure the economic health of a stock market.

The IPO pipeline is not replenishing the profession

The IPO pipeline is not consistently replacing delistings. Each departure may remove established IR, financial communications and reporting roles; new flotations create replacements only when they keep pace. IPOs create demand for Heads of IR, governance specialists and capital-markets communications advisers. A persistent shortage also weakens the future talent pipeline. The Financial Times called its December 2024 analysis “London’s shrinking stock market”, reporting 88 departures or primary-listing transfers against 18 arrivals that year. This imbalance is especially consequential for the replenishment of specialist public-company IR positions.

Not every delisting eliminates communications roles, and not every IPO creates a full IR team. Private businesses still need reputation expertise, but the balance of demand changes. Fewer public companies can mean fewer training grounds, senior IR appointments and career pathways. That makes IR’s elevation into strategy, valuation and corporate defence more urgent. Dimon also warned in the same shareholder letter: “I fear we may be driving companies from the public markets.” His concern was principally about the structure of capital markets; the implications for the next generation of IR and corporate communications professionals are an additional consequence.

The consequences for Corporate Affairs

When listed companies go private, what happens to their traditional Corporate Affairs teams? Public companies employ teams across financial communications, media, public affairs, sustainability and engagement. Private owners may reduce reporting requirements and consolidate functions.

But private businesses still face regulatory, political, employee and reputational pressures, alongside restructuring, leverage and eventual exit. Process-led communications roles may become more vulnerable; leaders providing strategic judgement on reputation, regulation and transformation can become more valuable. The critical distinction is between communicating decisions and helping shape them—protecting enterprise value regardless of ownership.

The challenge is whether Corporate Affairs can become indispensable under either public or private ownership. The Wall Street Journal reported in October 2026 that private-equity owners were reassessing CEOs as holding periods lengthened, with almost a quarter of backed companies held seven years or more. This is not direct evidence of reduced Corporate Affairs hiring, but signals changing leadership and reputation demands.

The question every chairman should ask

Every chairman of a listed company should periodically ask the CEO, CFO and Head of IR a simple question: “If somebody tried to buy this company tomorrow, do we know which shareholders would fight to keep us independent?” If the answer is unclear, a second question should follow: “Have we invested enough in Investor Relations to know?”

The strongest defence is not an investment bank called after a bid, but years of execution, capital discipline, credible management, informed ownership and a fair valuation. IR cannot create all of these, but connects many of them. Boards must decide whether IR is genuinely strategic—and, if so, fund it, empower it and appoint senior leaders.

If they do not, they should not be surprised when somebody outside the company understands its value better than the public market does. By the time a takeover premium appears, the real battle may already have been lost. Corporate independence is defended years before the bid, with senior, strategically empowered IR on the front line.