Duncan Mavin is a former Bloomberg Gadfly columnist.

The outcome of the "Brexit" vote is up for grabs, but what's clearer is that the run-up to June's referendum is likely to dim one of the few bright lights in London banking. 

Though volatility has weighed on trading and capital markets, U.K.-targeted merger and acquisition activity is actually up from last year. There have been 587 deals announced or completed in the U.K. this year at a total value of $40.3 billion, according to Bloomberg data. That's an 11.8 percent increase in the total number of deals compared with the same period a year ago, and a slimmer 0.6 percent rise in the total value of transactions.

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The number of M&A deals with a U.K. target has stayed strong so far this year
Source: Bloomberg
*Figure for 2016 Q1 is year-to-date

While that means the deals are getting smaller on average, buyers are paying up -- the average premium on deals so far this year is 39.5 percent, the highest figure since the first quarter of 2009 when valuations were depressed by the financial crisis (and some acquirers scouted for bargains).

So far so good. From here on, though, things will get tougher, with the EU referendum likely to weigh on activity. Leaving aside prognostications on the long-term impact of either a 'leave' or 'remain' result, the vote, which takes place June 23, is too close to call -- and that's too risky for most buyers to get comfortable with putting their money into a target.

The vote will have a decided impact on the pound and on equity valuations, so people and companies will naturally want to avoid wedding themselves to deals whose terms are based on current market conditions. U.K. investment bankers are bracing for a slowdown that could last as long as the campaigning.

That doesn't mean activity will grind to a halt -- the mooted London Stock Exchange-Deutsche Boerse tie-up proves that even complex cross-border transactions are plausible despite the looming referendum.

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The value of deals with a U.K. target fell sharply ahead of Scotland's Sept. 2014 independence vote
Source: Bloomberg
* 2016 Q1 figure is year-to-date

But as in much of the "Brexit" debate, the precedent is the recent Scottish referendum on independence from the U.K. In the months leading up to the mid-September 2014 vote, most pundits -- and pollsters -- forecast a fairly straightforward victory for the pro-U.K. camp. But a few weeks before, the polls tightened and uncertainty spread. What happened to U.K. M&A? The total value of deals in the quarter to the end of September 2014 was about 60 percent lower than the previous three months. 

U.K.-focused M&A bankers are once again headed for a few months in the doldrums.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Duncan Mavin in London at

To contact the editor responsible for this story:
Jennifer Ryan at