The last two days have certainly given deal makers plenty to discuss at one of the industry’s biggest conferences, the Tulane Corporate Law Institute in New Orleans, this week.
On one hand is a flurry of takeovers, notably Facebook’s $2 billion purchase of the virtual reality device maker Oculus VR. On the other is a push by activist investors, including continued assaults on eBay and Sotheby’s by Carl C. Icahn ad Daniel S. Loeb, respectively.
Both phenomena matched up with the findings of a survey of mergers bankers and lawyers by the public relations firm Brunswick Group. The poll, released on Wednesday, found that deal makers remain hopeful that acquisitions will continue, but they remain wary that dissident shareholders will still do their best to stir things up.
According to Brunswick’s survey, 98 percent of respondents based in North America believe that deal volume will grow or stay level from the period a year earlier. With a number of prominent transactions already announced this year, from Comcast’s $45 billion takeover of Time Warner Cable to Facebook’s $16 billion purchase of WhatsApp, there is plenty of ammunition for that belief.
About 73 percent think the busiest sector will be health care, up from just 14 percent last year. And nearly 75 percent of those surveyed predict that domestic deals involving corporate buyers will predominate here, just slightly higher than last year.
More than half of respondents think more deals will use a mix of cash and stock, taking advantage of high share prices. Indeed, Facebook’s two deals this year had a healthy equity component. Just 25 percent think that buyers will still pay for their takeovers completely in cash.
Despite optimism about deal activity, the survey’s respondents think their work will not be smooth sailing. About 69 percent of those based in North America think shareholder activists will increase their attacks on mergers. Roughly 39 percent believe those investors will demand that companies spin off or sell parts of their business.
Nine out of 10 think their corporate clients will invite activists onto their boards to forestall fights.
For more on what deal makers have on their minds, check in with DealBook. We’ll be on hand for all the debates and discussions at the institute, starting on Thursday.
