Times of Malta – Hedge funds are filling their boots on share speculation, as European hostile or unsolicited M&A bids reach a six-year high, fund sources say.<\/p>\n
Unsolicited bids are good news for share-speculation – the initial bid is typically rebuffed, increasing the chances of a second or rival offer and resulting share price hike.<\/p>\n
In a recent textbook case, shares at ports firm P&O rocketed 65 per cent during a three-month bidding war between Dubai Ports and PSA International, ending in Dubai Ports second, 520 pence offer.<\/p>\n
Its shares were trading near 315 pence per share before the first offer at 443 pence.<\/p>\n
“With this activity, specifically the amount of hostile situations, counter bids, multiple bidders, returns in this space should be good for a while,” said one hedge fund manager.<\/p>\n
Froth in the M&A scene has arisen as corporations flush with cash scour the financial markets for rivals, after a four-year spell of low interest rates and keen global demand.<\/p>\n