Fraikin: M&A prices typically too high

M&As remain popular due to management incentivisation and the perception of larger companies as more successful

Mergers and acquisitions are bad news for shareholders in the company doing the purchasing because the price paid is usually too high. That was the view of Invesco Frankfurt's head of client portfolio management Michael Fraikin, speaking at the recent Investment Week Family Office event. He said in order to succeed, a purchaser has to pay the most, usually meaning it went to the party that made the biggest error in estimating the value of the business. Despite this, M&A activity remains popular. Fraikin said this is because company managements are incentivised to win and bigger compan...