BANKING : Speculators Aren’t in the Market for Mergers, Acquisitions

Publicly held companies and foreign investors were the big buyers of small and mid-size firms in 1990, and they will continue their dominance of the merger and acquisition market next year, according to the Geneva Cos. in Irvine.

Geneva, the nation’s most active intermediary for mergers and acquisitions, said that in the past year purchases of their client firms by large, public corporations increased 58% and purchases by foreign investors increased by 56% over the previous year.

Total transactions for Geneva, meantime, increased just 10% during the year.

In previous years, speculators were the big buyers of smaller firms, but banks are no longer funding such purchasers, said Ronald J. Speyer, president of Geneva Capital Markets. Buyers in 1990 were looking for strategic fits--assets that fill voids in their own operations.

“Corporate America still believes it is more feasible economically to purchase market share, product lines and production facilities than to create them,” Speyer said.

Offshore buyers “are eager to invest in the future growth opportunity and profit potential of America” for both strategic and economic reasons, he said. “With the softness of the U.S. dollar, they view these acquisitions as economical, providing better value than acquisitions in their homelands,” Speyer said.

He expects more of the same in 1991. He said that publicly held corporations and foreign investors will dominate the merger and acquisition market again next year, despite a worsening U.S. economy and the promise of a united European market in 1992.

While its business grew in 1990, a recent slowdown caused Geneva to lay off 10% of its workers earlier this month.