February 7, 2019
Advisors consider stockpiling but falling equity prices support the M&A outlook
There may be no clarity on what will happen on March 29th, but there are signs M&A advisors are starting to look through the political gloom according our recent survey.
We asked London’s leading M&A bankers and lawyers for their thoughts on the outlook for deals in 2019. Most advisors were confident in the underlying health of the market. More than 80% believe the deal pipeline in 2019 is as large or larger than it was in 2018.
Politics remains a concern. Brexit uncertainty is seen as the most significant political risk to the pipeline with the prospect of a Jeremy Corbyn government and the US-China trade war joint second. We saw the proportion of respondents pointing to the uncertainty created by the trade dispute increase significantly in the second half of the survey period as signs of a slow-down in Chinese economic growth became clearer and the talks process stumbled. Nevertheless, there are signs that dealmakers are starting to look through the political fog as valuations become more attractive. Falling equity prices are now seen as likely to trigger deals as political certainty.
Amid the chaos at Westminster, M&A advisors suggested three broad strategies for preparing for a no deal Brexit and disruption at Dover. The pragmatic recommended putting aside tinned food, fuel and medication. The despairing proposed gin, white burgundy and Valium. While those with the stiffest of upper lips claimed there was no need to panic and they could live off the land. We don’t know who suggested securing the Vanessa Paradis back catalogue but their insistence it should be on CD suggests a more apocalyptic vision than most.
Thanks to everyone who took part.
The £1000 prize will go to Macmillan Cancer Research