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Top US media moguls attending New York's Reuters Media Summit December 4, said they are prepared for aggressive deal-making in 2009, spurred on by the economic downturn and fresh bargain-basement valuations.
Execs attending said they saw 'increased opportunities' for the strong to buy the weak, as the recession causes share prices to tumble further.With tight credit markets making it tough for companies to borrow money for acquisitions, executives expect more creative deals, such as share swaps between distressed companies without a lot of cash.
IAC/InterActiveCorp Chief Executive Barry "Killer" Diller said he was building a $2.2 billion stockpile of cash and could swoop in anytime on a "cascade of acquisition opportunities" in the media/entertainment sectors.
Chris "Big Bad" DeWolfe, co-founder/CEO of News Corp's MySpace, pointed out that start-ups valued at between $200 million and $300 million six months ago are now willing to sell themselves for as little as a tenth of that value.With venture capital funding for start-ups expected to trickle off as the economy worsens, DeWolfe expects valuations to get even cheaper, creating more deal-making opportunities.
Similar comments were also echoed by Time Warner Cable Inc's Chief Financial Officer Robert "Make My Day" Marcus and Regal Entertainment Group's CEO Mike "The Spike" Campbell.
Take Two Interactive Software Inc CEO Strauss "Zero Tolerance" Zelnick, who turned down a takeover bid from games publisher Electronic Arts Inc this year, said he expects more 'innovative' dealmaking ahead.According to Zelnick, depressed stock prices are providing media conglomerates the opportunity to make strategic buys of high-growth companies such as video game publishers and digital media providers, as a 'topsy-turvy' market allows buyers to create better deals to boost their company assets...
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