BoNY & Mellon Merger...

Merger mania has been good for stocks lately. I should also call this "buyout mania" as it is driven just as much if not more by buyouts from private equity money. Six or half dozen. Anywho, I have been a bull for awhile through the thick and thin of MSM angst and merger mania has been a pillar that has anchored me, after all, these incredibly smart and highly paid folks at the world's best private equity shops can't be totally out to lunch when they pay 30% premiums to take out these perfectly normally performing companies, right? Well, this gives me pause. Both of these companies' stocks have done nothing for years (since their last courtship dance in 1998) and the article hints that there may be a bit corporate egoism involved here. To be fair, Renyi had only just ascended to the CEO job of a company, BoNY, that was known for its long-standing, stolid, grey-haired management. To make a takeover bid so early was a little presumptuous by old line banking standards. Still, it is hard to completely dismiss the notion that this was a battle for pride rather than a cold and hard calculation of shareholders' best interests. Optimists will cotton on to the fact that since both stocks were stuck in the mud for ages, that embracing anything different than the status quo is a step forward. I love optimists, but that is a pretty thin reed. Merger mania might be getting into the silly part of the cycle, which means that investors should be wary...not necessarily bearish, but wary.

As a counter-point, here is the always perceptive Lex's take...