Friday 25 July 2014

Bear hug

Quelle surprise - another Bank of America Merrill Lynch bear hug has fallen over.

This year the Wall Street investment bank has advised several companies trying to buy rival businesses using a "bear hug", an aggressive tactic used in M&A to force the the target company to the negotiating table by making an indicative offer public.

Indeed, earlier this year Bank of America Merrill Lynch worked on one of the biggest bear hugs in British corporate history when it advised on Pfizer's £70 billion tilt for AstraZeneca. The group also worked for FTSE 100-listed Weir Group on its failed attempt to Finnish rival Metso.

The latest futile bear hug was Destination Maternity's £266m indicative takeover for retailer Mothercare.

Destination Maternity said this afternoon it was withdrawing its offer for Mothercare because the "shareholders of Mothercare have not supported our proposal and that the board of Mothercare was unwilling to allow us to conduct customary due diligence and engage in discussions regarding our proposal".

Funny that because I think I alluded in an earlier post that this latest bear hug advised by Bank America Merrill Lynch was unlikely to succeed. In case you need reminding, here is a link to that post:

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