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Follow on Google News | 2013 already showing ripe conditions for M&A rebound2013 is already showing signs of being an extremely active year for M&A activity, some even prompting the occurrence of a rare event on the modern M&A landscape – the bidding war.
By: Merrill Datasite The recent dealings around the offer by Michael Dell and a private investment firm to buy his eponymous computer company from public ownership back into private ownership has captivated the M&A world (http://www.datasite.com/ The offer made by Michael Dell was for a heavily-leveraged $24 billion, amounting to $13.65 per share and providing a 25 per cent gain for the share owners. Two of the biggest investors in the company have said that his offer undervalues the company and insiders have speculated that a bidding war could be prompted by these differing opinions. RJ Hottovy, a top equity analyst at business research firm, Morningstar, said that the fact that much of bid was funded by borrowed money showed that large leveraged buyouts could soon start making a comeback, after they all but died out when the recession struck. Hottovy told the Associated Press, "We're finally dusting off the cobwebs. It shows that banks are willing to take risks." Since November 2012, around a dozen significant deals (http://www.datasite.com/ Research carried out by business data provider, Dealogic, has shown that the value of the deals that have taken place or been announced so far this year hearken back to levels not seen since 2007, since the global economic downturn took hold. Some $219 billion worth of deals have been announced so far, a figure that stands at more than double the figure registered at the same time in 2012. It is also slightly above the figure registered for the same time in 2007 – which subsequently turned into a record year for deal values, topping a total of $1.6 trillion. The research has also found that initial public offerings of stocks have raised the most cash in two decades, with professional investors borrowing more and more to finance their trades (http://www.datasite.com/ Hottovy said that conditions do seem ripe for many more deals to take place over the course of the year. With interest rates reaching close to record lows, borrowing money has scarcely been cheaper and many companies, who were cautious with their spending while the economic downturn was at its worst, can now pay for M&A ventures out of their own funding. Indeed companies registered on the Standard and Poor's 500 index have 66 per cent more cash on their books than five years ago, amounting to more than $1 trillion. Hottovy said that while conditions for M&A currently look promising, investors must not get ahead of themselves and must remain aware of the still precarious state of global finances. Using last year as an example, he said that a flood of M&A deals (http://www.datasite.com/ About Merrill DataSite Merrill DataSite (http://www.datasite.com/) With its deep roots in transaction and compliance services, Merrill Corporation has a cultural, organisation- As the leading provider of VDR solutions, Merrill DataSite has empowered more than two million unique visitors to perform electronic due diligence (http://www.datasite.com/ For more information, please contact Merrill DataSite: Tel: +44 (0)845 602 6916; Email: info@datasite.com; Register to download the report here: http://www.datasite.com/ View our Knowledge Centre here: http://www.datasite.com/ Follow us on Twitter: @merrilldatasite End
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