In what is being interpreted as a sign of City confidence in the Labour Party, lawyers are reporting an unprecedented amount of flotations and takeovers scheduled for after the General Election.
Sean Watson, corporate finance partner at McKenna & Co, said: “In all previous elections I have known where there is a chance of a Labour government getting in, corporate activity has gone on hold because of the uncertainty. But this year we've got two flotations planned for September and one for May. We're also acting on a merger which is timed so that the General Election happens right in the middle of the offer period.”
The takeover is to be funded by shares with a cash alternative. Mergers underpinned by cash are particularly vulnerable to the uncertainty that usually surrounds an election since it can lead to a run on the pound.
He commented: “It's unprecedented and it must be a sign of how close Labour's policies are now seen to be to those of the Conservatives.”
Nigel Boardman, a leading corporate finance partner at Slaughter and May, agreed. “All the usual corporate deals we are involved in are carrying on regardless,” he said.
He also thought that some companies might be getting mergers done quickly before the election to avoid new competition rules Labour might introduce.
An additional factor, he said, was that since the last election, deals were much more international in flavour and so would be less affected by a change of government in the UK.
Anthony Salz, leading corporate finance partner at Freshfields, said: “We expected some fall-off in activity around now and immediately after the election, but that hasn't happened. I suspect it's because people have taken a view as to who will get in, got used to the idea and decided that there is nothing to stop them going ahead with their plans.”