The median YTD premium for U.S. mergers dropped to 26% from the 44% peak achieved in 2009, and the bid premiums in general are likely to be narrow as U.S. stock market is expected to maintain its upward momentum, notes Goldman Sachs.
David J. Kostin and team at Goldman Sachs in their report dated June 27, 2014, titled “US Weekly Kickstart”, notes U.S. mergers are on pace for a 50% growth relative to last year.
Falling bid premium
The Goldman Sachs analysts point out that the valuation of the equity market has implications for bid premiums. They note one approach to decipher the relationship could be to measure the control premium paid relative to the unaffected share price for transactions where...
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