The mergers and acquisitions market (M&A) in Bulgarian and the central European region have hit rock bottom in both deal numbers and volume but recovery could come halfway through 2010, experts told the second M&A conference of Kapital weekly.

Prospects were brighter earlier this year when experts anticipated a revitalise market by the end of 2009.

Consultants blamed it on the yawning gap between sellers’ and buyers’ expectations.

Luc Hanon, managing director of investment bank Rothschild, said some entrepreneurs still harked back to 2007 when Eastern Europe alone saw 80 deals with a total price tag of almost four billion euro.

Experts predict stagnation will not last long and more deals will be struck in the second half of next year.

"Obviously the market has collapsed but it seems we have hit some bottom," said Rosen Ivanov, managing partner at financial advisors Entrea Capital.

One sign that the investment drought is easing up is the fact that strategic investors no longer expect another imminent crash in Eastern Europe and are once again evaluating the region, he said.

Furthermore, equity investment funds are eyeing Bulgaria, planning to invest about 400 to 500 million euro in local businesses, he said.

Another factor favouring a rebound on the M&A market is said to be the Government’s commitment to creating a favourable, investor-friendly environment. No acquisitions of Bulgarian companies made it to the CCE top 20 this year but the market has developed steadily in the past two years. The market ranks in the middle of the table, trailing Poland, the Czech Republic, Hungary and Ukraine but ahead of Croatia and Romania.

The Bulgarian M&A market topped around 250 million euro since January versus 1.7-1.8 billion euro for the whole of 2008. Deal numbers have also diminished significantly, according to media and consultancy outfit Thompson Reuters.