Struggling companies are going private in a bid to stave off predatory companies, according to accountant PKF’s Direct AIM report. M&A’s Paul Driscoll reports
Struggling companies are going private in a bid to stave off predatory companies, according to accountant PKF’s Direct AIM report.
The adviser said low AIM ratings had “attracted predators or, caused managements to believe it would be better to take the company private.” It added that more vulnerable, smaller companies were more likely to be targeted.
The report revealed that there are lowly-rated companies with “cash in the bank that could fall prey to bidders if their valuations and the market do not improve.” It added though that the longer companies remain undervalued, the more likely it is that takeover activity would kick-start a recovery.
The Centre for Management Buy-out Research’s latest research supports the public to private (PTP) trend. This year’s first quarter recorded six PTP deals at a value of £3.7 billion, the same number of PTP’s were recorded in Q1 2007’s more favourable climate, with a value of just £513 million.