Outlook: Merger mania returns to the City

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The Independent Online
WHAT WITH the stock market adding 2 per cent a day, merger mania returning to centre stage, and Deutsche Bank seemingly intent on squandering another truck load of shareholders money, this time by buying Bankers Trust, it feels quite like old times again.

Who'd have thought it? Just a month and a half ago, we appeared to be staring into the financial abyss and the idea of a significant stock market deal, any deal, seemed remote in the extreme. Now we have no less than four FTSE 100 stocks in the bid frame. As money gets cheaper, investment confidence is returning (cheaper money makes equities look relatively good value), and with it, the urge to merge.

The pressure for consolidation never really went away, of course, but the appetite for it did in those panic stricken weeks when attempting to put a value on anything looked a mug's game. Now things seem a little better again, thanks largely to central banking willingness to cut interest rates, and the deals are being pulled off the shelf right left and centre. The next thing is they'll be reviving the Goldman Sachs flotation.

Those with cash to spend are already thinking they've missed the boat, but as long as the market remains firm, the share transactions will keep rolling in.