The return of the deals: they're back and they're hostile
Published 22/08/2010 | 05:00
LAST week's hostile $39bn (€30.5bn) bid for Canadian company PotashCorp by Australian mining giant BHP, Intel's $7.7bn takeover of internet security company McAfee and RSA's proposed acquisition of Aviva provide the strongest evidence yet of a resurgence in global M&A activity.
If this resurgence continues then several Irish and international companies could find themselves in the firing line.
With its share price now down to just €6.70, farmer-controlled insurer FBD must be top of the list of any potential Irish takeover targets. Way back in April 2008, Eureko proposed paying €36 a share for FBD, which would have valued the insurer at €1.2bn. At the current share price, FBD is valued at a mere €227m.
At that price what are the odds of Eureko returning for a second crack at FBD? Even if Eureko doesn't return to the fray, purchasing the clean-as-a-whistle FBD would be a far less risky way for an overseas insurer to enter the Irish market than taking on board Quinn Insurance.
DCC must also be a takeover candidate if M&A activity revives. Despite proving its resilience during the economic downturn, its disparate range of businesses has never found favour with investors and it is valued at just €1.56bn at the current €19.20 share price.
However, if the mega deals are back then punters should look no further than BP. Despite plugging the oil leak in the Gulf of Mexico its shares dipped below £4 again this week. This values the whole of BP at just £72bn (€87bn). At that price BP is an absolute steal. If the share price stays at anywhere like these levels then it's a question of when, rather than if, a predator comes calling.