2011 'a busy year for investment banking deals'

31 March 2011

The coming 12 months could be the busiest year for investment banking deals since 2007, it has been suggested.

Industry figures noted a rush for new deals in the first quarter of 2011 has resulted in corporate executives paying the most for takeovers since the collapse of Lehman Brothers Holdings took place, Bloomberg reports.

Before interest, taxes, depreciation and amortization, acquirers shelled out a median 9.2 times of earnings for organisations in the period - the highest amount since the second quarter of 2008.

Deals announced by Deutsche Boerse and AT&T brought takeovers to $567 billion, which defeated the pace seen 12 months earlier.

Andrew Bednar, a founding partner at investment bank Perella Weinberg Partners, said shareholders are pushing executives to make courageous moves and noted: "Equity markets will not reward corporate executives for managing cash ... they will be measured by how well they strategically invest cash."

HSBC Holdings chairman Douglas Flint recently claimed at least 80 banks should be deemed systemically important and therefore face increased regulatory scrutiny.

By Asim Shah

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