U.S. hedge fund set to buy UK lender for £543 million

Last December, New York-based speciality finance group, BasePoint Capital, agreed to take over FTSE250 firm, International Personal Finance (IPF) at an all-cash deal worth £543million. This marks the latest case in a UK corporation being bought out by a foreign entity.

Based in Leeds, IPF serves 1.7 million customers across Eastern Europe, Australia, and Mexico, but has recorded a consistently low valuation in comparison to its international rivals since its record high of 683 pence per share in 2013. Despite this, the business was highly profitable, (though margins were not as substantial), showing a £73million profit on £726 million worth of revenue.

The negotiations with BasePoint started over a year ago, but have generated significant controversy as shareholders, who will be receiving £2.35 per share, state that the figure underestimates the true valuation of the company. Shareholders have demanded £2.50/share, despite the money received mounting to a 7% surplus on the closing share price before the day of the confirmation.

However, Chairman Stuart Sinclair said: ‘Whilst the board continues to believe in the strategy and long-term prospects of IPF on a standalone basis, we recognise that the acquisition allows IPF shareholders to monetise their entire investment for cash at a fair price.’

Following the deal, which is estimated to be completed in Q3 of 2026, BasePoint assures that there is zero intention of operational or customer-facing redundancies in the first 12 months.

The sheer number of deals reflects how assets in the market have become competitive, validating the appeal of the British market

But this deal raises a critical question. Why are UK companies trading at a discount? For context, the S&P 500 trades at 22.2 times next 12 months’ earnings, while the FTSE 100 does at only 12.6. This is due to a myriad of structural issues. Recent budget cycles have raised confusion about what policies to adopt moving forward, prolonging economic uncertainty as the Pound Sterling continues to weaken. Therefore, even if UK firms record higher revenues than their international counterparts, buyers overseas, primarily in the US, have a cost-efficient method to expand, and, like BasePoint, often pay a premium just to secure the deal as it grants access to distribution networks and intellectual properties that bolster their power. This is clearly evidenced by the data released by the London Stock Exchange, which illustrates that foreign parties have contributed to takeover deals worth $142 billion in 2025, a 74% rise from 2024. Furthermore, private equity firms are entering high-value transactions and purchasing properties that domestic investors have frequently passed on because of financial limitations or risk aversion. Together, these factors support the idea that UK businesses provide attractive value prospects on the international scene.

Analysts consider this both a symptom and a catalyst of market repricing. The sheer number of deals reflects how assets in the market have become competitive, validating the appeal of the British market, whilst domestic owners can benefit from greater liquidity. However, the local dynamic raises concerns as the M&A industry reached $367 billion, the highest value since the pandemic, when domestic deals are at a low.

If this trend extends into essential industries tied to economic security and national infrastructure, there could be a mass political backlash and a raging public sentiment, underscoring the need to balance the country’s open investment strategy with domestic capital formation. Whilst definitely not at a permanent stage yet, the low valuation has been a point of concern for the past few years. Considering the UK’s transparent regulatory environment, this low valuation could put the nation at a greater risk of losing assets to foreign entities, especially as the country does not possess the same reputation for high-growth businesses like the New York Stock Exchange or NASDAQ. Hence, the next set of fiscal and monetary policies must focus on adjusting economic frameworks in a manner that boosts investor confidence.