America must readjust as lockdown bites business

The rash of cold feet has not generally extended beyond the US. Globally, only 593 deals had been withdrawn, down 9 per cent year on year. That’s partly because laws outside America make it much harder for a buyer to claim conditions have changed so much that it justifies pulling out of a deal. The Takeover Panel, which governs British M&A, made this abundantly clear back in 2001, when it knocked back WPP’s claim that it should be allowed to drop its offer for Tempus because of the 9/11 terrorist attacks. US-based payments group WEX is due in a British court in September to test that high barrier as it tries to break its deal to purchase two systems from Travelport, citing the pandemic. Lawyers say that they would be surprised to see many European deals falter because of Covid-19. “Europe is still a market where if you do a deal, you are locked-in,” says one top M&A lawyer. “People are looking not at walkaway rights but at financial adjustments.”