The Corporate Market Tracker team at Lexis®PSL has published a Trend Report examining market trends in UK public M&A activity. 2014 has so far seen a greatly increased deal flow compared to 2013, with more firm offers announced and higher deal values.
The first half of 2014 has seen the continuance of trends from recent years such as the preference for schemes of arrangement on larger deals, the decline in the level of private equity-backed bids, the popularity of cash consideration and a predominance of non-UK bidders. This year we have also seen strong pharma and TMT activity, more US tax inversion activity and a rise in the popularity of the formal sale process.
While cash remains the most popular form of consideration, alternatives range from shares only (suggesting a growing confidence in equity value) to a mixture of cash and contingent value rights (which may indicate that shareholders are more willing to accept a certain level of risk for the prospect of future gain). Lenders appear to be more willing to step in where dependable deal makers are involved in credible transactions.
The report provides an in-depth analysis of 39 firm and possible announcements, covering topics including transaction structure and value, foreign bidder activity, bid financing and the Panel’s policing of the boundaries of offer-related arrangements. The report features expert commentary from George Swan, partner at Freshfields Bruckhaus Deringer LLP, and Rebecca Gordon, partner at Dentons.