investors take a dim view of the value of megamergers and blame investment bankers for weakening the IPO market with unrealistic valuations, a new survey out today claims.
A poll of fund managers from 200 major City investment houses found 72 per cent believed megamergers such as that of Glencore and Xstrata offer little or no value to shareholders.
Some 70 per cent of the group, with collective assets under management of over $10 trillion (£6.3 trillion), also said investment bankers’ unrealistic valuations had played a role in the lacklustre IPO market. And according the survey by Capital Spreads, over a third (36 per cent) went further, saying valuations had been “a major cause of the IPO market’s poor performance.”
Despite their generally bearish stance, three quarters thought Direct Line’s IPO would prove to be a success, while a fifth believed it would be a major success.
Angus Campbell of Capital Spreads, said: “London simply hasn’t been seeing the sort of activity it once did in the nineties and early noughties when corporate takeovers and mergers were a regular occurrence.”