The Morning Ledger: Caution Keeps Lid on Takeover Prices

American companies are doing deals on the cheap. U.S. firms are paying just 19% more, on average, than their acquisition target’s trading price one week before the deal was announced—the lowest takeover premium since at least 1995, writes CFOJ’s Vipal Monga in today’s Marketplace section. That’s largely because of the cautious stance of corporate boards these days. Executives have to make calculations based on political uncertainty, industry cycles, a tepid economic recovery and expectations that the Fed’s easy-money policies might soon tighten. “Companies think it’s too uncertain a time to do major deals,” said Robert Kindler, global head of M&A at Morgan Stanley.

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