Speaking at The Deal's M&A Outlook 2009 conference in New York Tuesday, senior writer Matt Miller said: "I think you'd all agree the liquidity crisis is pretty much universal. With the ability to raise debt so impaired, what has been the creative response for those who want to get deals done?"
Grant Thornton LLP's Paul Beecy replied: "We're dusting off a lot of old strategies. A lot of those leveraged deals are off the table -- especially on cross-border deals. We're finding people looking more at alternative preferred equity investments. The only real big deals we see struggling now are the ones that expected post-closing leverage. If you can do deals -- especially smaller ones -- with cash, it's better."
Linklaters LLP's Nick Rees noted that it's definitely the case in emerging markets. "The constraint you have is legal techniques and different classes of equity. More simplistic deals are attractive."
Miller asked how important the strength of the U.S. dollar is.
Merrill Lynch & Co.'s Steven Baronoff said currency has never been a driver in transactions. "In '97 we had the view of the dollar rising, so some deals looked cheap. Nowadays you don't have that conviction like you had in '97."
Rees concurred. "Yeah, currency is
a factor, not
the factor." -
Baz Hiralal
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