JP Morgan vice chairman of investment banking for Australia and New Zealand, Jon Gidney, said the “buyers' strike” that halted M&A activity before last year’s federal election was not entirely political.
Instead, poor deal flows were caused by a “perfect storm” of factors including uncertainties surrounding the Chinese economy and commodity prices in general, cost pressures, a high Australian dollar and weak business sentiment, said Mr Gidney.
“This year, while business confidence is starting to improve, Australian corporations will be focusing on maintaining strong balance sheets and refining their strategic focus, in some cases involving non-core divestments and demergers,” he said.
“There is still a significant price gap between buyers and sellers and paying up for synergies requires a high level of confidence,” Mr Gidney said.
