Take-private transactions surged in 2024, with the total value of European deals involving a majority stake of over $1 billion rising 44% to $52 billion. According to Dealogic, 15 such deals were completed, compared to just 10 the year before, reflecting a renewed appetite among PE firms to acquire undervalued public companies.

Several factors are driving this increase in large-scale take-private deals. One of the key reasons is the growing valuation gap between public and private markets, particularly in Europe, where listed companies have struggled to command the same multiples as their US counterparts. This has created an opportunity for PE firms, which are deploying record levels of dry powder to take advantage of lower valuations.

Additionally, regulatory and governance burdens on public companies continue to rise. Many executives see private ownership as a way to focus on long-term growth without the pressures of quarterly earnings reports and activist shareholders.

The London Stock Exchange has been one of the hardest-hit markets, with a steady stream of companies choosing to delist or move their primary listings abroad. With £107 billion worth of public companies shifting to international exchanges in 2024, according to City AM.

For many companies, staying public no longer provides the benefits it once did. Liquidity concerns, a shrinking investor base, and weak valuations have made take-private offers from PE firms increasingly attractive, particularly for companies that require significant investment to execute their growth strategies.

As long as PE firms continue to seek out undervalued opportunities, this trend is unlikely to slow down. However, the rise in large-scale take-private deals should serve as a wake-up call for policymakers and market participants. Without meaningful reforms to enhance public market competitiveness, the pipeline of strong mid- to large-cap companies opting to remain public in the UK and Europe may continue to dwindle.