Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Burst of merger activity ahead

Rupert Bruce
Saturday 30 April 1994 23:02 BST
Comments

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

MERGERS and acquisitions are back in fashion in Britain. After only a trickle of deals during the recession, top City corporate finance departments now expect a sustained upturn in activity.

A burst of deals are due to move from the pending tray to the public arena in the next few weeks. Favoured targets include United Biscuits, Fisons, Cadbury Schweppes and Vickers.

Corporate financiers say the deals will be more international than those of the 1980s, featuring cross-border bidders from the US and continental Europe.

Stephen Latner, deputy chairman of SG Warburg, said: 'I think we are on the brink of witnessing a larger volume of merger and acquisition activity.'

This follows a fortnight that has seen two large bids. Enterprise Oil's pounds 1.4bn offer for Lasmo last week was the biggest hostile UK takeover bid since 1989.

It followed Lloyds' pounds 1.8bn agreed bid for Cheltenham & Gloucester Building Society.

David Barclay, deputy managing director of corporate finance at NatWest Markets, said: 'I think that people are beginning to flex their muscles and get a bit bolder. But bids are most likely to be agreed, because managements are looking over their shoulders at companies that last made hostile bids and bit off more than they could chew.'

The recent setback in the equity market has whetted appetites, as market capitalisations have fallen and made companies look better value.

But no one predicts that merger and acquisition activity will return to the heady heights of the late 1980s.

John Standen, chief executive, corporate finance at BZW, said: 'I think that the market has changed since the 1980s. Companies are much more professional about how they approach mergers and acquisitions.

'They are keener on approaching opportunities for their core businesses. It is a far more focused approach. Also, they are more international in their outlook.'

(Graph omitted)

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in