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Optimistic outlook for 2021 public M&A

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Optimistic outlook for 2021 public M&A 1

Optimism is returning and the outlook is positive for the Australian M&A market in 2021 after a COVID-induced crash in deal activity in 2020, according to Corrs Chambers Westgarth’s tenth M&A 2021 Outlook report.

The special report reveals that an environment of historically low interest rates positions M&A as a significant means of achieving growth and generating returns, including for private equity firms looking to deploy capital and strategic buyers focused on complementary acquisitions.

With the unprecedented challenge of the COVID-19 pandemic, global political instability and arguably the greatest economic challenge since the Great Depression, M&A 2021 Outlook details somewhat surprising trends emerging for the next 12 months and analyses a number of common COVID-19 myths and their influence on future M&A deal making.

Corrs’ detailed examination of the Australian M&A market draws on data taken from the firm’s proprietary database of transactions combined with in-depth research for the 12-month period ending 30 September 2020.

Key trends identified in the report include a rapid escalation in M&A levels and an increase in creativity in pricing and speed in closing deals, while also highlighting the critical need for support from target shareholders. Conditions also appear to be set for a continued rise in equity prices as a result of the ongoing influx of capital into Australian equity markets, making it imperative that bidders employ strategies to move quickly on M&A transactions.

Discussing the M&A 2021 Outlook, Corrs Head of Corporate, Sandy Mak, said “Despite a challenging year, our research indicates that 2021 could well see the volume and value of deals continue to grow. We are already witnessing this uptick in activity and while some industries and sectors are seeing a faster rebound than others, early indications are that the wider public M&A market will continue to strengthen over the coming months.”

Based on its detailed research, the M&A 2021 Outlook report discusses further key findings including:

  • Deal volume and value is the lowest since 2016, however volumes have shown significant recovery since June 2020.
  • More than 50% of deals in 2020 were ‘hostile’ and not recommended at the outset.
  • 71% of deals over A$500 million were structured by way of a takeover – a significant increase from prior years – largely as a result of increased competition for assets through rival bids.
  • Despite border closures and the tightening of foreign investment regimes, the percentage of deals with foreign bidders has increased materially since April 2020.

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Britain may raise contactless ceiling after pandemic payment surge

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Britain may raise contactless ceiling after pandemic payment surge 2

By Huw Jones

LONDON (Reuters) – Britain will look into raising the limit on contactless payments from 45 pounds to 100 pounds ($137) to keep pace with a change in spending habits during the coronavirus crisis.

Shops have encouraged contactless payments to minimise physical interaction between people during the COVID-19 pandemic and raising the ceiling will be part of a wider examination of such changes, the Financial Conduct Authority (FCA) said.

“People are increasingly making use of contactless payments. It’s important that payments regulation keeps pace with consumer and merchant expectations,” the watchdog said in a statement.

The FCA also confirmed on Wednesday earlier proposals that banks should generally not enforce repossessions before April 1, but credit providers would be allowed to repossess goods and cars from Jan. 31 as a last resort.

Consumers struggling in the pandemic still have until March 31 to apply for a payment holiday for mortgages, personal loans, credit cards, store, cards, catalogue credit, motor finance, rent-to-own, buy now pay later, and pawnbroking, it said.

“If you apply by 31 March, you may be able to extend up to 31 July when all payment holidays will come to an end.”

The FCA said that customers, wherever possible, should use online services for their banking, to minimise contact with branch staff, some of whom have face abused for telling customers to wear a face covering.

“This is a matter of concern for the FCA and we wish to thank the frontline staff for their significant efforts to keep branches open during this challenging period,” it said.

(Reporting by Huw Jones; Editing by Louise Heavens and Alexander Smith)

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Britain may raise contactless ceiling after pandemic payment surge

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Britain may raise contactless ceiling after pandemic payment surge 3

By Huw Jones

LONDON (Reuters) – Britain will look into raising the limit on contactless payments from 45 pounds to 100 pounds ($137) to keep pace with a change in spending habits during the coronavirus crisis.

Shops have encouraged contactless payments to minimise physical interaction between people during the COVID-19 pandemic and raising the ceiling will be part of a wider examination of such changes, the Financial Conduct Authority (FCA) said.

“People are increasingly making use of contactless payments. It’s important that payments regulation keeps pace with consumer and merchant expectations,” the watchdog said in a statement.

The FCA also confirmed on Wednesday earlier proposals that banks should generally not enforce repossessions before April 1, but credit providers would be allowed to repossess goods and cars from Jan. 31 as a last resort.

Consumers struggling in the pandemic still have until March 31 to apply for a payment holiday for mortgages, personal loans, credit cards, store, cards, catalogue credit, motor finance, rent-to-own, buy now pay later, and pawnbroking, it said.

“If you apply by 31 March, you may be able to extend up to 31 July when all payment holidays will come to an end.”

The FCA said that customers, wherever possible, should use online services for their banking, to minimise contact with branch staff, some of whom have face abused for telling customers to wear a face covering.

“This is a matter of concern for the FCA and we wish to thank the frontline staff for their significant efforts to keep branches open during this challenging period,” it said.

(Reporting by Huw Jones; Editing by Louise Heavens and Alexander Smith)

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Auto recovery fuels optimism for Europe’s earnings season

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Auto recovery fuels optimism for Europe's earnings season 4

LONDON (Reuters) – Expectations for European companies’ profits in the last quarter of 2020 are improving as the reporting season gets underway, driven by optimism car markers will recover faster than expected from the COVID-19 crisis, according to Refinitiv I/B/E/S data.

Companies listed on the pan-European STOXX 600 benchmark index are expected to see a 24.3% fall in fourth-quarter earnings, an improvement compared to last week’s prediction of a 26.2% retreat.

Refinitiv added that out of the 14 companies which had already reported earnings when it compiled the data, 78.6% had exceeded analyst estimates.

Germany’s Volkswagen’s notably reported on Friday a rebound in premium car sales in China and stronger deliveries which pushed its operating profit to 10 billion euros, well above the 4.8 billion euros awaited by analysts.

“We expect Q4 earnings season to deliver many beats across the sector”, UBS analysts commented separately in a note, warning however that some of the improvement had already been priced in the stock market.

More broadly, Germany’s auto industry association said on Tuesday it was optimistic for a recovery in the second half of 2021 despite the closure of stores and showrooms and a global shortage of semiconductors that has shut assembly lines.

Estimates for the first quarter also slightly increased compared to last week. Profits are seen rising 44% versus 43.5% in last week’s data.

(Julien Ponthus in Lodnon and Danilo Masoni in Milan, editing by Louise Heavens)

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