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M&A deals failed due to crisis exceed 2 bln euros

Several transactions and stock market listings, worth a total 1.8 billion euros, were canceled or delayed until further notice due to the international financial crisis, according to an analysis made by Business Standard based on market data provided by companies, investment banks or law firms. The amount includes, alongside the halting of transactions, companies' listings on the stock exchange and already negotiated lending contracts with the banks.

Distributor Interbrands and construction materials and decorations retailer Ambient, energy companies Hidroelectrica and Transelectrica and telecom operator Romtelecom are among the major companies that were forced to put their sale or listing plans on hold.

A company with turnover exceeding 1 billion euros, such as Interbrands has no buyers because of the crisis, but also due to its own vulnerability. Sales negotiations, launched several months ago, are 'at a dead end', according to sources close to the business, who added the sale price for the company would have been around 80 million euros.

On the postponed deals list there is also the listing of a package of 20-25 percent hold by the state in Romtelecom, one of the big companies on the telecom market, controlled by Greek OTE Group. 'The listing of a share package of 20-25 percent from the 45 percent one hold by the state in Romtelecom was delayed both due to the economic crisis because a bourse exit is inopportune now, as well as because we expected the European authorities to gave their assent to the acquisition of a 35 percent share package in OTE by Deutsche Telekom', said Communications Minister Karoly Borbely who evaluated the company at 1.5 billion euros, meaning that the state might draw 375 million euros from this operation.

The deal between constructions materials distributor Ambient from Sibiu (center) and private equity fund EQT has failed at least for the moment. The advanced values exceeded 100 million euros.

In the case of Carpatica bank, the lending institutions management held sale talks with several potential investors, but no transaction resulted. The value of the bank slumped as the entire capital market, Carpatica capitalization reaching at 106.2 million euros.

Domo listing, the second local home appliances retailer, according to turnover, is blocked on an undetermined period due to economic unfavorable conditions. In the field of energy 600 million euros in loans are blocked for Hidroelectrica and Turceni Energy Complex.

'Currently, we assist at a strike staged by the buyers, nothing is sold, nothing is bought, they waiting for the market and prices to get stable. In fact this is the main problem, those with money expect the price to drop and the sellers are constrained to accept lower prices, the lowest', explained Gabriel Zbarcea, managing partner of Tuca, Zbarcea & Associated law firm.

'Most investors blocked several transactions as they are waiting the companies' value to decline or because, although they had liquidities, they are facing problems in their home countries and they have to fill in the gaps there,' according to Raiffeisen Investment Romania Managing Director, Ioana Filipescu. So far, companies' value dropped 30-50 percent due to the crisis, she added. 'Before the crisis, the mergers & acquisitions market had great potential and a 15 multiple was easy to obtain. Now, however, a 7.5 percent multiple is great.'

'Everybody think twice ahead of investing. This is a more turbulent period, Romania's rating was downgraded, so that investors study well the price, to see if it corresponds to the economic reality. Previously it was a sellers market, but now nobody is eager to take the plunge. Projects will be further drafted, for which there are funds, but they will be more closely examined, and this is valid for all fields', said in her turn Miruna Suciu, partner lawyer in Musat and Associates.

 

Sursa: http://www.rompress.ro

Tags: euros percent million market crisis

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