M&A to halt till Super-Committee Figures it Out

We believe that any meaningful M&A activity will halt until the budget cutting Super-Committee determines their path.  The markets hate uncertainty, and we have uncertainty – squared.  Gilead today announced the $11b acquisition of drug developer, Pharmasset.  This will likely be the last announced deal for some time.  The markets are sliding with all this uncertainty, so:  Why buy today and when it will be cheaper tomorrow???

Amazingly, the members of the Super-Committee thinks their actions, or rather inactions, are disconnected from Wall Street (http://on.wsj.com/v5SrZe).  Rather, they believe the market is swooning over the European situation.  Nobody said you need brains to go to Washington.

Shareholders will continue to want exits, so it's a good time to start the M&A process–knowing it won't come to fruition for at least six months, and most likely longer.  But, if you're currently fortunate enough to be in negotiations, you can assume that Congress has just added another four to six weeks to your closing date.  Assuming the deal will not be renegotiated, and that it will happen.