January 24, 2024

Will 2024 Bring More Unsolicited and Hostile M&A?

I’m not usually one for fortune-telling, but this recent Freshfields blog makes some well-supported predictions for M&A trends in 2024. Among them is the expectation that an increase in hostile M&A is in our future — driven by board room optimism on both sides of the table. Here’s an excerpt:

Upticks in stock prices during 2024 will feed optimism in board rooms about standalone plans and that, in turn, will make resistance by target boards to takeover entreaties more common.  At the same time, in the board rooms of bidders, directors will continue to feel pressure from investors to use their companies’ excess cash and highly-priced equity to do accretive acquisitions wherever available. In addition, board room optimism leads to taking risks on allocating capital to acquisitions rather than the more conservative approach of share buybacks.

The result is that we are going to have more companies committed to acquisition strategies in 2024, while at the same time we will have more of the companies on their lists of targets remain enthusiastic about their stand-alone prospects. The result will be a boon for unsolicited and hostile M&A.  Many M&A advisors over the last several years have done very well nursing friendly combinations.  There will be a premium for M&A advisors who are expert, from prior eras, on unsolicited M&A tactics.

Meredith Ervine