Low-cost shares usually make nice takeover targets. That’s as a result of undervalued corporations, notably these with robust underlying property, established market positions, or untapped potential, can supply important alternatives for patrons.

These corporations additionally current alternatives for retail buyers, as shareholders can profit from the fast appreciation of share costs when takeover affords are made. Simply have a look at Hargreaves Lansdown inventory, which jumped 51% final yr after the board agreed to a takeover in August.

So, listed below are two corporations that I feel could possibly be takeover targets in 2025.

This gene-editing chief appears low cost

CRISPR Therapeutics (NASDAQ:CRSP) could possibly be a beautiful takeover goal attributable to its low valuation and powerful stability sheet. It’s additionally a world chief in gene therapies, with an authorised gene-editing remedy, Casgevy, which may generate up to $3.9bn in annual income. Along with Casgevy — the world’s first authorised gene remedy — the corporate has a robust pipeline of remedies in growth, together with these concentrating on cancers and diabetes.

The above actually means that CRISPR Therapeutics is undervalued, with a market cap solely round $3.3bn. This comparatively low valuation makes it an interesting acquisition goal for bigger healthcare corporations trying to enter the gene-editing market. Furthermore, with $1.9bn in money and $200m in debt, this inventory’s enterprise worth is simply $1.6bn.

What’s extra, some analysts counsel there’s a ready-made purchaser in CRISPR’s associate on Casgevy, Vertex Prescription drugs. Now Vertex is a large firm with a market cap of $106bn and greater than $6bn in money. With Vertex answerable for 60% of Casgevy prices and set to take 60% of earnings, it could be one thing of a no brainer to consolidate management over the programme — and the pipeline — by means of a takeover.

CRISPR is a inventory I personal, and whereas I’m tempted to purchase extra, my holding already represents important publicity to the gene modifying sector.

Discounted inventory, full-price trend

Most buyers will likely be aware of Burberry’s (LSE:BRBY) challenges over the previous 12 months. The inventory slumped on falling gross sales and challenges in China, the place the economic system seems to be lacking its goal.

With the share price considerably down from its highs — albeit up from current lows — the inventory continues to be being touted as a takeover goal. In reality, in November 2024, there have been rumours that the Italian skiwear firm Moncler was concerned with buying the British luxurious model Burberry.

Along with its model energy and distinctive positioning in British luxurious, a takeover sounds possible given the consolidation that already exists throughout the trade. Vogue homes like LVMH and Kering have acquired a number of luxurious manufacturers through the years, delivering economies of scale and synergies between issues like skincare manufacturers and high-end Belmond lodges.

Having rode Burberry shares to the height, offered, after which purchased once more at a a lot decrease price solely to see them fall additional (I offered once more), I’m staying away from this iconic model. Nonetheless, I’m certain some buyers will see a chance.