It is apt timing by Motley Fool contributor Mike King to cover some of the potential takeovers on the ASX, because there can be no doubt that corporate activity is heating up. For example, just this week SAI Global Limited (ASX: SAI) announced a takeover proposal.
The Australian yesterday announced we had entered "takeover mania." Just weeks ago David Jones Limited (ASX: DJS) announced a serious proposal, having earlier rebuffed the suggestion of a merger with Myer Holdings Ltd (ASX: MYR).
Takeovers, mergers or even just proposals are sure to benefit Macquarie Group Ltd (ASX: MQG). In September last year Motley Fool contributor Peter Andersen wrote that "there are now definite signs that merger and acquisitions activity in particular is picking up. Should this occur, it will be a bonus." If you want evidence of this, Macquarie Capital is advising the SAI Global takeover proposal. As an aside, Macquarie Group shares are up 30% since Peter first suggested they were a buy in July 2013.
Share registrar Computershare Limited (ASX: CPU) is one of the obvious beneficiaries of corporate activity. As the dominant share registry, it stands to gain from the increasing number of IPOs. I've lost count by now, but the end of 2013 saw several overhyped IPOs, such as Ozforex Limited (ASX: OFX) and Freelancer Limited (ASX: FLR). The (short term) success of those IPOs is likely to encourage more.
On top of that Computershare provides advice and handles the necessary paperwork for mergers and acquisitions. There's no doubt the company will benefit in a major way from increasing corporate activity. However, the company yields 2.8%, trades on a P/E ratio of almost 20 and at almost 20 times cashflow. It is therefore fair to say that while it offers growth, shares are not cheap.
Those looking for a bargain might be more attracted to Advanced Share Registry Limited (ASX: ASW). It too offers share registry services, and stands to benefit from corporate activity in the same ways Computershare does. Although the company yields more than double Computershare at an impressive 6%, it does not seem to be benefitting from the uptick in takeovers, mergers and IPOs. That's because the company is based in Perth and much of its business has historically been in the mining sector, which is currently cooling down.
