Shares of Bodycote surged on Friday after the British engineering services group disclosed it had received a conditional £1.52 billion ($2.04 billion) takeover proposal from U.S. private equity giant Apollo Global Management, underscoring the continued wave of foreign interest in undervalued London-listed companies.
Apollo’s all-cash approach of 885 pence per share represents a premium of nearly 27% to Bodycote’s previous closing price and highlights how overseas investors continue to view segments of the UK market as attractively priced relative to peers in the United States and Europe.
The proposal would also allow shareholders to receive Bodycote’s planned final dividend of 16.1 pence per share for the 2025 financial year, subject to approval.
Bodycote shares jumped as much as 19% after the announcement, pushing the stock close to the offer price and extending gains over the past 12 months to more than 50%, including Friday’s rally.
The company said Apollo’s proposal followed several previous approaches and confirmed discussions were ongoing, though it cautioned there was no certainty a formal offer would ultimately materialize.
Under UK takeover rules, Apollo has until June 19 to either announce a firm intention to proceed or walk away.
The potential deal adds to a growing list of British companies attracting overseas buyers as global investors increasingly target UK-listed assets trading at discounts to international peers. Analysts have repeatedly argued that London’s equity market continues to suffer from weak valuations, slower economic growth expectations, and lower investor participation compared with Wall Street.
That environment has created fertile ground for private equity firms and strategic acquirers searching for stable cash-generating industrial businesses.
Recent examples include bid interest surrounding Intertek and Tate & Lyle, while several other UK-listed firms across infrastructure, industrials, and consumer sectors have either been acquired or approached by foreign buyers over the past two years.
Bodycote’s business profile makes it particularly attractive to long-term infrastructure and industrial investors. The company specializes in thermal processing and heat-treatment technologies that strengthen and improve the durability of metal components used in critical sectors such as aerospace, defense, automotive, and energy. Its services are deeply embedded in industrial supply chains and often tied to long-term manufacturing programs, giving the business relatively predictable demand patterns.
The aerospace and defense exposure has become attractive as Western governments are sharply increasing military and industrial spending amid geopolitical tensions involving Russia, China, and the Middle East. Demand for specialized metal processing has also been supported by rising investment in next-generation aircraft, energy infrastructure, and advanced manufacturing systems.
Thus, Apollo’s interest reflects a broader trend among private equity firms pursuing industrial and engineering companies that could benefit from reshoring, supply-chain diversification, and increased capital expenditure linked to defense and energy security priorities.
The deal also comes as private equity groups sit on large pools of undeployed capital while traditional buyout opportunities remain constrained by high borrowing costs and economic uncertainty. Industrial service companies with steady cash flows and exposure to structural growth themes have therefore become increasingly attractive targets.
For the UK market, however, the steady stream of takeover approaches continues to fuel concerns that British companies are being acquired at depressed valuations before local investors fully recognize their long-term strategic value. London’s stock market has struggled in recent years with lower liquidity, weak IPO activity, and an exodus of high-growth companies seeking listings in New York instead. The valuation gap between UK and U.S. equities has become particularly pronounced in sectors tied to industrial technology, engineering, and infrastructure.
Apollo’s move for Bodycote may therefore reinforce pressure on UK policymakers and regulators already trying to revive London’s competitiveness as a global capital market. At the same time, the interest signals continued confidence in Britain’s advanced manufacturing and engineering capabilities, particularly in sectors connected to aerospace, defense, and industrial resilience.
The proposal nonetheless adds to mounting evidence that overseas buyers increasingly see Britain’s industrial sector as a source of relatively cheap but strategically valuable assets.
