Banks get an M&A boost
US merger and acquisition activity totalled $13.9bn (£8.5bn) last week, further fuelling hopes that an appetite for deals is returning.
A flurry of deal announcements came ahead of Labor Day, including Walt Disney’s $4bn acquisition of Spiderman parent Marvel Entertainment and eBay’s $2bn sale of 65 per cent of Skype to a consortium of private investors.
The uplift in activity comes as good news for the investment banks, with Bank of America Merrill Lynch and Goldman Sachs each advising on just over $9bn of the deals in the US, according to Thomson Reuters.
Closer to home, transport group National Express received a sweetened takeover offer of 500p per share from a consortium of private investors, led by its largest shareholder the Cosmen family, on Thursday.
National Express said that it would respond to the offer, which values the firm as £765m, in due course. The announcement was accompanied by a statement from rival Stagecoach, which said it had agreed in principal to buy National Express’s UK bus and rail operations from the consortium if the bid succeeds.
The offer brings year-to-date UK private equity-backed M&A activity to $6.3bn, still 73 per cent down year-on-year.
Earlier last week, the Office for National Statistics (ONS) said that the number of domestic M&A in the UK fell to a 40-year low of 41 in the second quarter of the year.
Foreign companies spent £400m for M&A in the UK in the second quarter, down from £12.3bn in the first, the lowest level since the second quarter of 1987.
Also last week, Dainippon Sumitomo Pharma agreed to buy US firm Sepracor for $2.6bn, the latest in a string of overseas acquisitions by Japanese pharmaceuticals firms.