Hostility Rising

InBev's $52-billion unsolicited bid for Anheuser-Busch is among an increasing number of hostile measures undertaken by investors "galvanized" in recent months by the range of attacks, the Financial Times reports this morning citing new research from Dealogic.

Even usually conservative Chinese companies are turning hostile as illustrated by Sinosteell's $1-billion takeover of Midwest, an Australian iron ore producer.

Henrik Aslaksen, co-head of global M&A at Deutsche Bank, tells the FT that "the lack of credible white knights and activist shareholders pushing for quick resolutions and financing available for strategics is also fueling the high number of unsolicited bids."

As evidenced by A-B's acquiessence to InBev, some hostile measures are turning friendly as directors "pay attention to their duties towards shareholders," the FT reports.  That in turn may be driving up the number of transactions successfully completed with only 31 percent of unsolicited or hostile M&As so far announced in 2008 failing compared with an average failure rate of 42 percent since 1997, according to Dealogic.

An unsolicited bid is defined as an offer with an intent to purchase the target and in the public domain that has not been agreed to or recommended by the board's target.