News Digest: M&A traders start targeting beaten-down stocks
January 20, 2023
Deal markets in the US are turning their attention to select beaten-down stocks that have also been drawing considerable interest from activist investors. A survey by Bloomberg News says this trend comes at a time when mergers and acquisitions led transactions have been plumbing their lowest levels since early 2020.
The survey, which reached out to 15 event-driven merger arbitrage desks, analysts, brokers and fund managers, highlights American Equity Investment Life Holding Co, software maker Momentive Global and chemical distributor Univar Solutions as potential targets. These three companies have faced considerable activist investor interest following boardroom changes.
However, the report shortlisted the fewest list of M&A candidates over the past twelve months, indicating that the overall outlook remains subdued given the recessionary trends and the possibility of further interest rate hikes by the Fed. Meanwhile, a report by Brett Buckley at WallachBeth Capital LLCpoints to 40 pending deals involving publicly listed US targets and more than $500 million of equity value.