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Is now a good time to borrow to make an acquisition?

In the event the MPC left the rate unchanged. Whilst the reaction of the equity and bond markets to this was a positive one there remains a significant ground swell of opinion that to control inflation this financial instrument should be used.

The above being the case, with base rate at 0.1 % it is clearly in the short term a good time to borrow money (arguably on a fixed rate basis) to effect an acquisition. This applies not just to corporate and financial acquirers but also to management teams thinking of effecting a management buyout. It is of course possible that base rate won’t change when the MPC next meets in December and that any changes in the short term will be small however carpe diem must surely be at the forefront of thinking.

The next steps

Our corporate finance and taxation teams are experienced in advising on mergers and acquisitions involving privately owned companies. Please contact Robert Kidson on or your usual UHY adviser should you wish to discuss this further.

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