PHILADELPHIA, Sept 29: Hostile takeovers have more than doubled to a record level in the United States so far this year, boosted by falling stock prices and weakened corporate defenses.

US hostile deal activity has reached a record high of $211 billion so far this year, up 140 per cent from a year ago, according to Thomson Reuters data.

“Given the volatility in the equity markets and the number of companies trading at distressed levels, companies with strong balance sheets are trying to be opportunistic and go after targets that may be temporarily depressed,” said Stefan Selig, Bank of America Corp’s vice chairman of global investment banking and head of global mergers and acquisitions.

Unfriendly deals, including unsolicited and hostile deals, accounted for 22.1 per cent of all US mergers so far this year, compared with 12.1 per cent for all of 2007, according to FactSet MergerMetrics.

Unsolicited deals include any takeover offer made without negotiations or without an auction being held for the target. A hostile bid means the suitor has bypassed the target company’s board and taken its takeover offer directly to shareholders.The uptick in hostile and unsolicited offers comes as buyers with strong balance sheets and cash-on-hand are feeling pressure to find new growth in the weak economy, so they turn to takeovers to find creative ways to build shareholder value, according to Christopher Ventresca, co-head of North American mergers and acquisitions at JP Morgan Chase & Co.

Unsolicited deals this year crossed international boundaries as foreign companies, such as InBev NV, emboldened by the weak US dollar, grabbed a foothold in the US.

InBev ultimately won the hand for US brewer Anheuser-Busch Cos Inc for $60.4 billion after sweetening its bid to $70 per share, up from its original unsolicited offer of $65 per share.

Unsolicited bids also crossed a broad range of sectors, such as healthcare, energy and power, technology, retail, real estate and consumer products, and investment bankers see no slowdown in the diversity or volume of such activity.

“Companies with strong balance sheets and access to capital will continue to put that money to work in a strategic way,” said Jeffrey Stute, co-head of North American mergers and acquisitions at J.P. Morgan.—Reuters