Half of takeover talks ending in no deal
HALF of all takeover talks targeting UK listed companies now end without a deal being struck, according to law firm EMW Picton Howell.
The findings underscore the difficulties would-be buyers of listed firms are having in putting together funding for their takeover plans.
EMW said that 52 per cent of buyout talks ended without a deal in the second quarter of this year, compared with just 23 per cent in the third quarter of 2007, before the financial crisis struck.
The number of failed talks rose to a high of 58 per cent in the first quarter of this year, the group said.
EMW principal Teja Picton Howell said another problem is that buyout targets have been more likely to walk out of talks after receiving bids that they believed were at unfairly low values.
She said the giant rallies that have taken place on stock markets in recent months have vindicated those company bosses that rejected buyout attention at the depths of the market woes. “The figures from the latest quarter show a slight improvement in the success rate of takeover talks.
“It may be because bidders are coming in with more realistic prices. Barring unexpected shocks to the economy we expect that improvement to continue,” added Picton Howell.