Are we set for a takeovers and mergers extravaganza?
There is growing speculation in financial circles that a number of companies are under the microscope with regards to potential takeovers and mergers. The latest company to come under the spotlight is Aviva which has strained its relationship with institutional shareholders by refusing to reveal a recent £5 billion approach from RSA for the company's general insurance operations. This is just the latest in a number of takeover rumours to hit the UK market with many believing we could be on the verge of a takeover and mergers and extravaganza.
The problem for UK companies, aside from relatively low share prices compared to recent years, is that a number of overseas bidders have seen their positions strengthened due to the weakness of sterling. If this situation continues for any great length of time there is no doubt that we will see overseas bidders cherry picking the best of the UK business arena and offering potentially attractive take-out prices to shareholders.
Despite the fact that many share prices are still suffering from the economic downturn there is no doubt that "Cash is King" especially with the UK economy expected to downturn in the latter part of 2010 and 2011.
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