Maksim Labkouski
Ken Moelis, who runs small M&A investment bank and consulting firm Moelis & Co., expects shareholder activity to increase “significantly” this year.
The companies “will try to stay in the basic business, which is their employees,” said Moelis, founder and CEO of Moelis & Co., said in an interview on CNBC on Thursday. “There will be huge profit pressure from prices, from energy and from people holding onto their culture and activists will try to take advantage of that.”
“There will be a real fight between the boards trying to do the business they’ve built and the activists trying to capitalize on this opportunity,” Moelis added.
Moelis’ comments come after billionaire activist investor Nelson Peltz earlier this month announced he was looking for a seat at Walt Disney Co. (dis).
According to Moelis, while there have been discussions of mergers and acquisitions, the actual transactions being announced seem very difficult at the moment.
“There is a lot of discussion, but no, I don’t see any activity completed right now because of the financial markets…” Moelis said. “The last two or three weeks have had some light. I think we’re in the middle of the storm. I don’t think things will get better for a long time.”
Moelis, which also has a restructuring division, also predicts more bankruptcies this year.
“I think there are some companies that only fund at 6x-7x leverage and may not have a 5x-6x-7x market,” said Moelis. “You can even have companies hit their business plan that have trouble accessing refinance credit.”
Earlier this week it was reported that UBS plans to raise M&A trader ratingsThat’s when Wall Street firms cut prices.
Earlier this month Eric Cantor, vice president of Moelis & Co. (NYSE:MC), said he expects transactions to increase this year after decreasing in 2022.
