Exclusive outtakes from industry leaders
Listen to how M&A legal guru Martin Lipton views today’s shareholder activism compared with the greenmail strategies of the ’80s.
”Those who are looking for the short term pop are doing today’s version of greenmail,” he said at the Reuters Investment Banking Summit.
Merrill Lynch’s investment banking president said that M&A activity may be on track to beat the record volume of deals in 2000.
“The year-to-date volume looks like it’s on track to surpass the peak of 2000,” said Gregory Fleming at the Reuters Investment Banking Summit in New York.
Fleming’s comments come after the pace of growth in the third quarter slowed, leaving many experts to question whether 2006 would indeed be a record year
M&A legal guru Martin Lipton said that 30 years ago companies were unlikely to undertake strategic changes in the face of shareholder activism or takeover threats.
“Companies today have been much more inclined in the face of that kind of pressure to undertake strategic revisions,” he said, pointing to management or strategy changes, or even moves like that undertaken by Kerr-McGee, to sell assets under pressure from corporate raider Carl Icahn.
Greenhill has a novel approach to compensation. All of its managing directors know the size of all the other managing directors’ bonuses. They actually hand out a memo.
“It’s a strange policy but it works,” says Greenhill President Scott Bok ”I always joke that it makes us more productive than other firms, because at other firms you spend the whole month of January trying to figure out what the guy in the next office got paid. With us you can dispense with that, because you hand it out and there it is and now you can get back to work.”
Gregory Fleming, a top investment banking executive at Merrill Lynch, can’t bring himself to say the name of the M&A world’s top dog: Goldman Sachs. And Fleming wouldn’t say if it’s Merrill’s goal one day to be No. 1. But he did say his company wants to be in the top three or five in any investment banking category in which Merrill competes.
Greg Fleming, co-head of investment banking for Merrill Lynch, told the Reuters Investment Banking Summit that he forsees a larger role for cash-rich hedge funds in mergers and acquisitions, particularly in buyouts led by private equity funds. Fleming said hedge funds are “hugely important” in helping to finance such deals, since they increasingly making a market for deal bonds and bank debt.
That’s music to the ears of top executives who arrange the deals, many of which will be attending Reuters Corporate Finance summit starting on Monday, where panels of journalists in New York and London will quiz CEOs, department heads and lawyers on where the M&A boom will take the market — and the banks’ bottom lines — next.
Guests at the four-day summit will include Greenhill CEO Bob Greenhill, Blackstone President Tony James, and Citigroup head of European investment banking Tom King. It kicks off on Nov. 13. Stay tuned.