By Brenon Daly
In recent weeks, there’s been a lot of talk about a thaw in the once-frozen M&A market. While that’s true for overall activity, it’s also turning out to be true for specific deals that for one reason or another found themselves on ice at some point. Whether the transaction originally froze because of financing, regulation or pricing, a few of the notable deals are now looking like they’ll get done. That warming trend in dealmaking stands in sharp contrast to the climate at the beginning of the year. The Ice Age that spanned the first few months of 2009 is the main reason why total M&A spending for this year is likely to come in at just half the level it was in 2008.
Among the transactions that have been reheated in recent weeks: JDA Software’s (JDAS) consolidation play for i2 (ITWO), the sale of once-hot-but-now-cold 3Com (COMS) and Cisco Systems (CSCO) warming up to the shareholders of Tandberg (OTC:TADBF), who had given the networking giant a Nordic brush-off in its first bid for the videoconferencing company. (Incidentally, the additional $400m that Cisco will kick in for Tandberg will deplete its overseas cash stash by a whopping 1.3%.) What’s interesting in this trio of deals is that all of them involve the target company pocketing more money than was offered in an earlier proposed transaction. That’s certainly a change in the climate from this time last year, when we were writing about bidders ‘recalibrating’ their offers lower.