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| Tuesday, February 9, 2010 |
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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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March 10, 2008 12:01 AM ET
> As the end of yet another merger boom nears, new research indicates some companies could do better by holding off on that purchase sitting in the pipeline. A study by Michigan State University professor Gerry McNamara and his co-authors looked at more than 3,000 public companies involved in industry acquisition waves between 1984 and 2004, and found that acquisition returns bottom out about two-thirds of the way through a cycle. Early birds saw stock gains averaging 4.2% post-deal, while companies that hopped on the bandwagon later experienced an average 3% drop in share price. What gives? Early movers tend to make better-researched choices and buy at more advantageous prices, while latecomers are more likely to lose value because they often act on market hype rather than on rational financial decisions. —Roxanne Downer > While the M&A market has fallen on lean times thanks to a lack of credit to finance deals, the appetite for mid-market companies (valued under $1 billion) has held up much better so far this year than the demand for large buyouts. “We're still seeing activity across a broad range of industries in the middle market,” said Steven Bernard, director of M&A market analysis at Robert W. Baird & Co. And increasingly, the deals are being done by companies, or strategic buyers, rather than by private equity shops. In February, strategic buyers announced 170 mid-market deals for U.S. targets for a total value of $19.7 billion, according to Dealogic. That is just one fewer—and $1 billion less—than in the same month last year. Private equity buyers announced only 11 mid-market deals worth $2.7 billion in February, vs. 20 deals worth $5.7 billion last year. The market for $1 billion-plus companies, on the other hand, has plummeted. Just 11 deals were announced in February for a total of $61.7 billion—and Microsoft's bid for Yahoo accounted for almost three-quarters of that—compared with last February's 24 deals worth almost $120 billion. —Andrew Osterland
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