2 FTSE 100 stocks I think could be takeover targets in 2025

If the UK stock market gets moving in 2025, I wonder if the FTSE 100 might offer a few tasty buyout targets for those with big pockets?

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If some of our FTSE 100 stocks stay as cheap as they look for much longer, I can see the possibility of a few takeover attempts in 2025.

Potential suitors might even try to get in before interest rates come down much further and stocks start attracting more attention again.

Needs fixing up

In May 2023, Vodafone (LSE: VOD) CEO Margherita Della Valle famously said: “Our performance has not been good enough. To consistently deliver, Vodafone must change.

The trouble is, changing a telecoms giant the size of Vodafone was never going to be an overnight job. So far, we’re seeing cost savings, improvements in efficiency, and the beginnings of better focus.

Slashing the uncovered and unaffordable dividend was a good start. But then I’m a bit perlexed by the recent share buyback.

Could it be that the company is trying to give the share price a boost and help fend off possible predator interest?

Not a buy for me

Right now, for me, I’m still not seeing Vodafone shares as an attractive prospect. So I’m not going to help push the price up.

Saying that, forecasts are bullish about Vodafone’s earnings in the next few years. They see the price-to-earnings (P/E) ratio coming down to under 8.5 by 2027. And analysts mostly have Vodafone down as a buy.

Oh, and the rebased dividend could still yield 7% based on this year’s forecasts. I could easily be wrong, and bold investors might do well to consider Vodafone for a long-term dividend investment. Unless someone buys it out first.

The approval for Vodafone’s merger with Three might set regulators against such a move, mind.

Retail consolidation

I’ve seen one or two hints from industry observers that discounter B&M European Value (LSE: BME) might be up for grabs as retail weakness continues.

The company, which owns B&M stores in the UK and France and the UK’s Heron chain, posted falling like-for-like sales again in this year’s Q2

The 1.9% decline is still an improvement on Q1’s 5.1% fall, however. And I wonder if it might bring would-be buyers sniffing around.

Hmm, a falling P/E based on forecast earnings growth, with analysts expecting this year’s 3.7% dividend yield to rise, mean I should probably take a closer look myself.

Easing the squeeze

One thing I’m really not sure about is what overall effect any fall in inflation and interest rates in 2025 might bring.

On the one hand, it could give the whole retail sector a much-needed boost. So many are shoppers have to watch their pockets at the moment. But then, might it also erode the advantage the discount retailers enjoy? I’m not so sure, as I recall Lidl and Aldi increasing market share even before the inflation crisis.

I’m unlikely to buy B&M myself, but that’s really just because discount retail isn’t something I invest in. And I’d never buy anything just on the hopes of a takeover.

But I think B&M could come good in 2025, and I’ll be watching for bid approaches.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended B&M European Value and Vodafone Group Public. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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