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NEWS IN BRIEF
Small-caps should move on
JVs EXPECTED TO RISE
The number of CEOs who
believe that joint ventures
(JVs) will play a greater role
T
he small market cap of many AIM- and advisers (56%) polled believe that smaller
listed companies and questionable companies with market capitalisations of less
“quality” of some of these ventures than £5 million should be encouraged – but not
than M&A in cross-border
have been detrimental to the profile of London forced – to migrate to other exchanges
growth has surged, according
to PwC’s 12th Annual Global
Stock Exchange’s platform for growth or markets.
CEO Survey.
companies, according to a survey by Other changes that respondents most wanted
This shift may reflect the
accountancy firm Mazars. to see include attracting larger, more established
lower cost and risk associated
Robin Stevens, corporate finance partner companies to AIM, the introduction of “free
with joint ventures, as well as at Mazars, said: “Some companies on AIM do float” limits for entrants and setting out a
the increasing popularity of not intend to grow, whether organically or by minimum percentage of shares to be held by the
collaboration to deal with the
acquisition. Others see flotation as the end of public admission – currently there is no
challenges of international
the process rather than the beginning.” minimum requirement, but an informal
expansion, said the report.
The majority of AIM companies (52%) percentage of ten per cent is often used.
Of the 1,124 respondents,
only 20 per cent said they
What changes would you like to see introduced to attract more
had completed a transaction investors to, and improve liquidity in, the AIM market?
last year. The decline in
AIM companies
Advisers
M&A was most pronounced in
emerging economies in Asia 14% 11% 13%
13%
and Eastern Europe. Cultural
differences, unexpected costs
13%
and delivering deal value
were the three most common
22%
22%
22%
concerns of CEOs in
considering M&A.
11%
The research also indicated
8%
that CEO confidence was
at its lowest level since
23%
28%
2003, when the Global CEO
Surveys began.
Segment the AIM market by size, valuation,
Increase the size of companies
Worldwide, just 21 per cent
or free float criteria
of CEOs said they were very
Widen tax incentives
Introduce minimum free float to new entrants
confident of revenue growth
in the next 12 months, down
Introduce more regular financial reporting Introduce minimum free float to existing
from 50 per cent in last
year’s survey.
AIM companies
CEOs worldwide were also
gloomier about longer-term
growth as well, predicting
Value of Deutsche deals climbs
a slow recovery. Only 34 per
cent said they were very
confident of growth over
the next three years, down
from 42 per cent last year,
G
erman M&A activity climbed in were five in 2008, whereas only one was
value last year, despite the effects of completed the year before.
the financial downturn, according to Most activity took place in the industrial,
when CEOs were just number cruncher Mergermarket. manufacturing and engineering sectors, which
beginning to recognise the Although there were fewer deals in total recorded the largest announced deal of 2008,
full impact of the credit crisis
(537), representing an 18.5 per cent fall the €22.8 billion acquisition of Continental
on the global economy.
on the previous year, the total value of by Schaeffler.
“The recession has rocked
announced deals rose by eight per cent Potential deals in the year ahead could
the psyches of CEOs and
to €90 billion (£80 million). include the offloading of non-core assets by
created a global crisis of
While the number of deals valued over companies, such as Daimler and Deutsche
confidence,” said PwCs’
Global CEO Samuel A
500 million fell from 36 in 2007, to 23 Borse. It is also believed that retail group
DiPiazza, Jr.
during the same period last year, there was a Arcandor will ramp up its disposal
surge in the number of mega-deals – there programme in the near future.
Mergers & Acquisitions 7
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