Morning business news - June 3Tuesday 03 June 2014 09.34
The recent acquisition of Beats Electronics by Apple has put the spotlight again on the area of company mergers, particularly in the tech sector.
With a huge number of indigenous companies springing up here in the past few years, might now be a good time to cash in on the fruits of the entrepreneurial effort?
According to Martin Kelleher, a Corporate Partner at law firm Mason, Hayes & Curran, now may well be a good time for a company founder to consider ‘cashing-in’ on their product.
“We’ve seen an increased amount of activity in the (mergers and acquisitions) sector and that’s being driven by a number of factors,” he said.
“We have an improving economy, less economic uncertainty and we have a pent-up demand because that normal M&A activity that would be customary in the market was quiet for a number of years and is now increasing.”
Mr Kelleher said there are now buyers – particularly the large multinational firms – that have large cash reserves and are looking to spend.
He said a sale brings a lot of attractive benefits to company founders, as it offers an opportunity to profit from their hard work as well as potentially grow the business further.
“It allows them first of all to take some money off the table in terms of the purchase price,” he said. “There’s also the opportunity for additional expertise to come from the multinational – not just in terms of cash but also additional IP, additional resources.
“So we’re seeing in a lot exits now that the management team are staying around to continue to grow the business... the ability to be able to grow your business on a global scale is a particular attraction,” he said.
The international baked goods group Aryzta has released figures for its third trading quarter.
Group revenue for the three months to the end of April was up over 16.5% to €1.37 billion.
North America and Europe - where the bulk of its activity is centred - performed particularly well.
The company is guiding double digit growth in underlying earnings per share for the full fiscal year which ends in July.
Inflation numbers and unemployment statistics for the euro zone are due out today.
Consumer prices are expected to be still rising at a rate of less than 1% - well below the 2% target set out by the ECB - which makes it all but certain that the Bank will take some form of action when it meets on Thursday.
Speculation is centring on a rate cut - perhaps to the main rate which is currently at a record low of 0.25%.
They could also opt to bring the overnight deposit rate into negative territory which means that banks would effectively have to pay the European Central bank to deposit money there.
Bolstering the case for action is eurozone manufacturing data released yesterday showing that manufacturing growth slowed more than expected last month.
Samsung's holding company, Samsung Everland, is planning to go public.
It's understood it will place an initial public offering of its shares next year, perhaps in the first quarter.
This is part of the handover process from chairman Lee Kun-hee to his children. Lee was hospitalized last month after suffering a heart attack.
The US city of Seattle has voted to raise the minimum wage to $15 per hour - the highest level of any major US city.
It's more twice the national minimum which now stands at $7.25, although 38 states have set it higher.
Washington state's minimum is set at $9.32 but workers in Seattle at that level will see their pay rise to 15 dollars over the next three to seven years.
Nationally, Barack Obama has called for a $10.10 federally-mandated minimum wage, but that would require action by Congress.