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From Kirsten Bischoff, Opalesque New York : Barclays Capital and Nomura Holdings bankers are anticipating the value of merger and acquisition deals in 2009 to decline 30% (to about $2tln). However, recent reports that the S&P 500 corporations are sitting on the highest level of cash balances than any other time in history. “Cash rich companies that are not growing organically, but can grow through acquisitions are facing an incredible opportunity set.” Explained Vikas Mittal, analyst at Glazer Capital Management. “Target companies that they are looking to acquire which would have cost 50% more a year ago are trading at a fraction of the valuation levels relative to what they have been over the past few years.”
New York based Glazer Capital manages approximately $200 million across an onshore and offshore fund as well as through separate accounts. The firm, which was launched in January 1999 by Paul J. Glazer has never had a down year, and is wrapping up its tenth year +6.12% (YTD through Dec 12).
With cash on the sidelines, and corporations identifying possible M&A targets, the final piece of the formula before the expected return to deal making is market stability. “You can’t price a deal with markets moving 4 and 5% a day,” says Mittal. “If markets continue to stabilize as they have over the past few weeks, we will see deals begin to take shape.”
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