Europe’s class of 2021 listings have not recovered. A Crunchbase analysis of the largest European companies that listed that year found market capitalisations down by more than 55%, with the weakest names down more than 80% from their offer prices.

These companies occupy a challenging position, too small to be included in larger indices, too illiquid for active trading, and trading well below their initial valuations. Boards typically act only under shareholder pressure. In our experience, a rejected offer rarely ends the discussion, as each reporting period at a depressed price further weakens the current strategy.

AJ Bell research shows that the value of UK takeovers in 2026 already doubles that of 2025, with most activity concentrated below £500 million, where these “orphans” are found.

Boards now face a clear choice, develop a credible turnaround plan or seriously consider acquisition offers, as persistent discounts will continue to attract interest. Fund managers must report these depressed values annually, and their patience will determine the timeline.

We expect acquisition approaches to companies trading below their listing price to continue rising through 2027, with more deals likely to succeed on a second attempt, reinforcing the case that these post-IPO orphans are becoming merger targets.

#IPO #Mergers #CorporateFinance