Topic of the quarter: Since our first quarterly at the end of 2015, 14 of the 59 companies we included in our valuation tables have been bid for (one delisted and one rather high-profile company has gone bust) and there have been other bids outside of our watch list. Given that those tables were simply designed to show the range of companies present within the sector – not a hit-list of undervalued opportunities – the fact that 24% of them have been taken over is worth revisiting. The demise of Carillion, severe financial pressure at Interserve and warnings from the likes of MITIE, Capita and Serco have dominated news flow but it should be remembered that the sector is broad and highly varied both in terms of business model and performance. If the troubles of a minority of the sector drag down wider valuations, then there is evidence that there is an army of potential bidders (possibly reinforced by further weakness of sterling) ready to take advantage
