Bankers and corporate communication executives report no evidence of Australian M&A deals being cancelled as a result of turmoil in global financial markets.

Bankers do, however, see deals going slow.

With Envirosuite, this week, becoming the second listed Australian target to receive a reduced proposal since Donald Trump’s January inauguration, they are reluctant to call it a trend in-the-making.

UK software group Ideagen cut its indicative proposal to AUD 9c per share from AUD 10c for the environmental intelligence technology company following completion of due diligence.

Earlier this month, a consortium of Proprium Capital Partners and AVID Property agreed to acquire AVJennings following due diligence at a lower AUD 65.5c after submitting an indicative AUD 67c proposal in November. Rival bidder Ho Bee Land also conducted due diligence but never made a binding offer following an AUD 0.70 indicative proposal.

One banker argues the Envirosuite proposal was “very generous” for a business which has always struggled, so it is not surprising it never added up in due diligence. “This is deal specific.” Even at the reduced AUD 9c, the premium is 100% to the AUD 4.5c closing price of Envirosuite shares on 21 February and 96% to the volume-weighted average price (VWAP) of Envirosuite shares for the one month to and including 21 February.

Alex Cartel, head of global advisory at Rothschild Australia, sees no anecdotal evidence of potential M&A deals in Australia collapsing as a result of current market volatility. “But volatility is causing price and value reassessment in some cases.” He adds that Australian credit markets remain open, compared to the US and UK which appear to be showing signs of caution. He argues that volatility also presents as a buying opportunity for motivated bidders.

A third banker agrees that deals are going slow or are on hold and at risk of falling over. “Some deals can get done. Those subject to finance will need markets to settle.” He expects private equity funds to pull back. “Public market price expectations have not changed sufficiently for repricing.”

A fourth banker, too, finds a lot of bidder nervousness but argues this seems more binary than just a price adjustment. “They either lean in and get it done or withdraw the bid.”

The first banker has noticed no slowdown or hesitation in general around M&A “I expect it but nothing so far.”

Three corporate communication executives who typically have visibility towards the pointy end of a proposal going public, have seen no evidence of deals been cancelled.

Last month, this news service reported a surge in Australian M&A proposals in sharp contrast to decline in such activity in the US.

For the first time since October 2004, Mergermarket data shows there were more monthly Australian indicative and binding proposals for ASX listed companies made in February than in the US. February saw 15 indicative and binding proposals in Australia as compared to 13 in the US.