WEST PALM BEACH, FL (www.hedgeco.net) – European Merger and Acquisitions hedge fund strategy have been slow during the first two months of 2005; analysts believe such drop may be the lowest levelseen in the strategy in ten years. New surges in deals have revitalized European Mergers and Acquisitions. Such deals are occurring in the area of cross-border takeover bids. According to newsreports, the new rally is expected to continue as more bankers see new opportunities for takeovers in Germany, Spain and Italy.
One European M&A manager at a top U.S. investment bank said, �It�s been a bit spotty so far, announced volumes (in the first quarter) were somewhat disappointing, particularly when compared to the U.S.” the manager commented. According to data from Thomson Financial, transactions in the European Merger and Acquisitions strategy during the first quarter of 2004 added up to only $150.7 billion. During a similar period in 2004, such activity added up to $206.6 billion. U.S. totals for Merger and Acquisition activities for the first quarter of 2005 added up to $251.7 billion.
Claudio Costamagna, chairman of investment banking for Europe, Middle East and Africa at Goldman Sachs Group Inc., believes more corporate raids will be forthcoming because private equity firms have an estimated E100 billion for future Merger and Acquisition activities. Most of such assets are coming from outside investors according to Costamagna. He further said, �Those funds have been raised and will have to be invested.�
Another manager, Jitesh Gadhia head of U.K. M&A at ABN-Amro believes that, �Consolidation in the domestic sector can only go so far.� Other factors supporting such anticipation include desires by hedge fund managers to compete for Merger and Acquisition opportunities wherever they can find them. More hedge fund managers have been seeking to compete with private equity firms for M&A opportunities. Hedge fund managers have ready cash to finance such opportunities.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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