LEADING bankers and capital market participants predict a rebound in takeover activity in the mining and energy sectors.
This will include renewed foreign investment, following resolution of the debilitating tax row with the Federal Government.
O'Sullivan Partners managing partner Tony O'Sullivan said that concerns about tax uncertainty had "skewed" investors and executives towards "inertia and inaction".
"What it will probably take is one CEO and board to be emboldened and act, and I think we'll very quickly see a change in market sentiment," Mr O'Sullivan told The Australian.
"The right acquisitions will probably get support from the markets as well if people decide to do equity raisings in order to prosecute their acquisitions."
The executive chairman of Macquarie Capital's global natural resources advisory group, John Prendiville, said last week's deal would remove uncertainty that had prevented mergers and acquisitions and equity capital raisings in areas unaffected by the new tax - specifically smaller companies and those not mining for coal or iron ore.
"They can now get on with the plans they previously had set without the uncertainty of the previous tax model," Mr Prendiville said.
"The other thing that should happen is any company contemplating raising capital can do so with more certainty, both from the company's perspective and the investors."
But for those affected - the limited field of bigger coal and iron ore companies - there would still be an element of uncertainty "until this thing is inked".
Another banker, who declined to be named, said that corporate activity had "slowed right down because the Chinese were not sure how to value things" while the debate about the tax was raging.
"I wouldn't be surprised to see some of those processes accelerate to conclusion - even in the next few weeks," the banker said.
Already there are signs of a quick and sharp rise in activity.
On Friday, OZ Minerals spent about $100 million to acquire a 19 per cent stake in fellow base metals producer Sandfire Resources, one of several mid-sized deals reckoned to have been on hold while the tax dispute raged.
There are also larger transactions poised to be done in coming weeks, including the likely sale by Santos of a 10 to 20 per cent stake in its Gladstone LNG project in Queensland.
RES Price at posting:
54.5¢ Sentiment: Buy Disclosure: Held
