UPDATE ON… ECHIQUIER VALUE EUROPE - July 2026
The objective of Echiquier Value Europe is to invest in companies capable of creating value, adopting a contrarian view of the market and without any preconceptions regarding sector, investment style or theme.
The first half of 2026 saw a favourable environment for European equities, despite a continuously challenging macroeconomic and geopolitical context. Apart from the news focusing on the war in the Middle East, the resurgence of mergers and acquisitions is one of the key developments.
The United Kingdom stands out clearly in this regard. According to Reuters and LSEG[1], deals involving UK companies already totalled $192 billion by mid-May 2026, which is almost as much as the total for the whole of 2025. This trend can be attributed to a persistent discount on UK companies, a market that remains deep, a well-established legal framework for public offerings, and a pound sterling that remains weak against certain currencies.
PORTFOLIO ACTIVITY
Tactical operations and fundamentals
Two companies in the portfolio, DCC and Tate & Lyle, are currently the subject of takeover bids. The energy distributor DCC is a good example of the persistent gap between market value and intrinsic value. After rejecting an initial offer that was deemed insufficient, DCC received a revised offer of 6,672.22 pence per share[2], representing a premium of approximately 33% on the weighted average share price over the three months preceding the initial approach. In our view, the asset’s appeal lies in its dense distribution network, strong local positions, a level of client proximity that is difficult to replicate, and its ability to generate recurring cash flow. The gradual divestment of non-core activities has also clarified the scope of the group’s operations, making it easier to understand and, in turn, more readily valued by an industrial or financial buyer.
Tate & Lyle, a food and drink company, follows the same logic. Ingredion’s recommended offer of 615 pence per share represents a 64% premium on the last quoted price prior to the announcement of talks. It captures a value that the market had been slow to recognise, despite the group’s profound transformation from a business historically linked to sugar into a platform for speciality ingredients. Size, formulation capabilities, access to major clients and the breadth of applications constitute tangible competitive advantages in this market. Ingredion is therefore not just paying a multiple. It is also acquiring a rare platform that is complementary and immediately deployable on an industrial scale.
INVESTMENT STRATEGY
Our approach involves identifying companies whose market valuation, in our view, does not fully reflect the quality of their assets, the strength of their competitive positions, their cash flow generation or the strategic options available to them. Mergers and acquisitions are not at the heart of the investment process, but can act as a powerful catalyst for value creation.
A public offer must be assessed in the light of the company’s intrinsic value, the quality of the acquirer, the likelihood of the deal going ahead, the regulatory conditions and the distribution of value creation between selling and acquiring shareholders.
Disclaimer: The information, data, stocks and opinions of LFDE provided herein are for information purposes only and thus do not represent an offer to buy or sell securities, investment advice or financial research. Past performance is not a guide to future performance. The fund entails foreign exchange risk, the risk of capital loss, the risks associated with equities, markets and investing in small and mid-cap stocks, discretionary management risk and interest rate risk related to changes in rates. For more information on its characteristics, risks and fees, please read the regulatory documents available on our website www.lfde.com. Investors should be aware that the units/shares featured may not be available for sale in their country.
[1] Reuters, London Stock Exchange Group
[2]Proposal of 10 June 2026