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TDE2012: Skeptics -- Donald Drapkin, Tyler Mathisen

by Baz Hiralal | Published December 1, 2011 at 11:03 AM

From the European debt crisis to bankruptcy filings by AMR Corp. and MF Global Holdings Ltd, to the flaring of Occupy Wall Street, the past year has been unpredictable for everyone. We have a heavy hitting-crew to tackle some of these issues.

Roundtable guests include:

Donald G. Drapkin, Chairman, Casablanca Capital LLC
Richard M. Jeanneret, Americas Vice Chair, Transaction Advisory Services Ernst & Young LLP
Robert A. Profusek, Partner, Jones Day
David Mussafer, Managing Partner & Co-Chairman, Executive Committee, Advent International
Mark Shafir, Head of Global M&A, Citigroup
Leo E. Strine Jr., Chancellor, Delaware Court of Chancery
And moderator Tyler Mathisen, "Power Lunch" Co-Anchor, Vice President, Strategic Editorial Initiatives, CNBC

After a chilly walk around the NYSE and some friendly chatter with security, The Deal Economy 2012 roundtable guests set up shop by the NYSE boardroom at 8 a.m. sharp. Mathisen kicked things off by asking Richard Jeanneret about E&Y's recent survey statistics about deals in 2012. "M&A attitudes are surprisingly robust here, but I'm skeptical about surveys in general," he said.

Jeanneret said it's telling because the survey was taken about two to three weeks after the S&P downgrade of U.S. debt. He said, "Corporate cash piles had record levels."

Drapkin jumped in saying that there is a problem that will overshadow the M&A and private equity market: the state of markets around the world. "Forget a $60 billion deal or AT&T's proposed acquisition of T-Mobile for $39 billion. If banks in Europe go down, where does debt go? Market swings are too wild, you have a rough time putting collars on a deal, you can't make decent breakup fees. It's a huge damper on dealmaking."

Mathisen acknowledged Drapkin's defensive stance, saying, "What does your survey say about the markets? I'm skeptical of them. What does it say about C-suite intentions and will they do deals." Profusek added: "Wait! I think we're being too gloomy. Next year will be a year of singles and doubles but not grand slams. You can't just sit there. People will ask, 'What are you doing with all that cash? I can make more than 15 basis points on it.' "

Strine agreed. "This will be a great year for M&A. The U.S. should expect our share of the global pie to go down. However, we should be more concerned about growing at home."

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