Deals in the pipeline on London’s junior market could lead to widespread market recovery, according to new findings.

In its latest Direct AIM report, accountant PKF said takeover activity on AIM “remains high with the prospect of a mixture of large and small deals on the way that could potentially spark a market recovery.”

The review reveals that whilst there were 13 takeovers in the first quarter of the year -- a 35 per cent drop on the same period in 2007 -- there are still a number yet to be completed, such as the management buy-out of public sector IT provider Civica and the ongoing bid battle for recruitment company Imprint.

Also highlighted in the report is the fact that the last time the AIM All-share index reached a low in 2002-03, the ensuing increased takeover activity “seemed to spark a recovery in the market. There were 37 takeovers in 2003, the most in any one year up until 2006.”