Goldman, Sachs & Co. (NYSE:GS) has been the king of the hill in terms of dealmaking, what with so many investment banks having been thrown out of business, ailing or in disarray, so it was with much interest to hear what the bank thought of the current M&A environment.
At the SEC Hot Topics Institute held by R.R. Donnelley & Sons Co. (NYSE:RRD) -- and co-chaired by Christine B. LaFollette at Akin Gump Strauss Hauer & Feld LLP, T. Mark Kelly at Vinson & Elkins LLP and Kelly Brunetti Rose at Baker Botts LLP -- at the posh River Oaks Country Club in Houston on Thursday, Goldman Sachs managing director Adam Peakes talked to the mostly corporate attorneys in the audience about themes and trends in the M&A markets.
The key takeaways: that the most recent contraction in M&A is similar to the one in 2000; that there's significant disagreement on where natural gas prices are headed, which is impeding dealmaking in that sector; and expect more stock deals, which are more palatable to sellers who think they can benefit from any upside and buyers who want to protect their balance sheets.
Peakes noted that CEO confidence is the No. 1 driver in M&A activity, which appears to be on the rebound, citing
Chief Executive Magazine's CEO confidence index as of Aug. 30.
"We're seeing increasing CEO confidence but lack of visibility on the future," he said. "Nobody is ready to say we've hit bottom."
Peakes, the former Rice University basketball star who was promoted to managing director at Goldman last year, has been busy of late: He
advised Baker Hughes Inc. (NYSE:BHI) on last month's announced acquisition of BJ Services Co.
(NYSE:BJS) for $5.5 billion, the biggest oil services deal in a decade.
Peakes was asked by one of the panelists whether there would be more deals for the rest of 2009. He replied: "I hope so."
- Claire Poole
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