Radio New Zealand - Te Reo Irirangi o Aotearoa

Companies expected to go on buying spree

Updated at 10:33 am on 10 March 2010

The head of Fisher Funds expects merger and acquisition activity to pick up this year, as cashed-up companies look to buy growth.

Fisher Funds managing director Carmel Fisher says Australian coal seam methane producer Arrow Energy and telecommunications company Pipe Networks are under takeover offer.

The firms make up 20% of Fisher Funds' Australian portfolio.

Mrs Fisher says there have also been three takeover offers for portfolio companies in its international fund, each of them at about a 40% premium to the trading share price.

She says over the last 18 months companies have been reducing costs and paying off debt, which has left many with spare cash. They can either use this to pay shareholders or acquire businesses as a way of buying growth.

A global survey recently released by KPMG shows shows trade buyers from emerging economies are back on the acquisition trail, while deals instigated by those in developed economies are still declining.

However Carmel Fisher thinks it is difficult to tell where takeover activity is being generated, or which markets are being targeted.

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