"Par" Wars: the Venturer Strikes Back

If there's one thing I've generally observed as a corporate lawyer, it's that there is often (but not always; i'm thinking of you, 2013 - 2015) a slow down in transactions as summer approaches and then during the summer months themselves. Put it in simple terms, my experience is that people generally like time off (or need it off for childcare reasons) during the summer in favour of a well-deserved break (as an American friend once told me "given the weather here in the UK for 10 months of the year, no wonder you Brits are always so morose until the summer comes along").

The article makes a few interesting observations; a slow in investment across Europe, both in terms of number and value, which it states can be associated to Brexit; increased economic trepidation re: the UK due to Brexit and the recent (and current UK-political turmoil) and an analysis (over a short period of time it has to be said) of where funds are being invested, with the summary being essentially that the UK has lost out from an investment perspective at least to other European countries (see my previous articles where I mentioned this as a possibility in the immediate aftermath of Brexit).

Whilst I think it's impossible to say definitively whether Brexit is the sole cause of the observations, it would seem fair to speculate that it is not the only cause. Said holiday-season is much underway, as I've highlighted above (although this won't, of course, result in itself in investors and buyers not investing/purchasing) and the recent political uncertainties have undoubtedly unnerved a few investors, but I think investors and buyers need a bit more credit than that; I think they are waiting to strike back.

Post-Brexit the pound has fallen in value and the stock markets have fluctuated hugely. Fluctuations, for all the negative impacts they can have, can also conversely make investors lots of money and, in the process, strategic buyers can also pick up some great deals. Looking at the value of the pound, I find it impossible to believe that the pound won't drop further once Article 50 of the Lisbon Treaty is actually invoked. Whilst bad for sellers, this is good news for buyers, particularly foreign buyers; a lower pound means a better price for them which in turn could lead to increased economic activity in the UK and a drop in both investment in, and purchases of, foreign entities, in favour of UK equivalents or competitors. Whether sellers will want to sell is another matter, and one that is dependent on a number of circumstances, but looking in my (somewhat hazy) crystal ball at the potential political and economic landscapes and the fact that the UK will likely be involved in negotiations with the Council of the EU for years to come post-invoking Article 50, it seems unthinkable that people, and investors, won't be looking for exits during this period of time. I therefore think that activity may, perhaps after a further drop, pick back up to active levels, likely during the course of 2017; time will tell.

The above of course shouldn't be read as me predicting in any way that the value of all UK companies will somehow fall; you only have to looking at the premium being paid by SoftBank to purchase ARM to see that good UK companies, with strong management, excellent offerings and a forward-looking strategy will get a great price, regardless of political and other economic factors.