Using signaling theory, the conclusion has to be that managers of acquiring companies are using a higher proportion of cash relative to the last M&A cycle, as they believe that there is greater upside relative to downside risk in acquisitions.

Investors must be wondering whether the company will suffer from the winner's curse.

I feel the rally has stalled amid disappointment about progress in the war, but Bush is right, the allies will be victorious, and that will provide more fuel for the market to advance from a purely sentiment point of view rather than on fundamentals.

In our view, the message that is emerging from buyers is that acquisition candidates are becoming too greedy. Prices are reaching unsustainable levels.

The last time (that) happened it was a contributing factor to the market crash of 1987. While we are not forecasting a similar event in this cycle it does provide food for thought for investors over Christmas.

A key issue for investors is how high the bidding war for the LSE could go.