Law firm Herbert Smith Freehills, which defines mega deals in the public arena as those above $1 billion, found those transactions climbed back to six-year highs in terms of deal numbers during the last fiscal year. In the ­Australian Public M&A report 2014 the law firm said mega deals accounted for one in five announced transactions during the period compared with one in 20 the previous financial year.

In dollar terms, mega deals amounted to $38 billion, up from just $5 billion in the previous fiscal year but some way behind the most recent high of $72 billion in 2010. Foreign suitors were on the front foot bidding for ­targets including David Jones, Envestra and Treasury Wine Estates.

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"[It's] one of the clear indicators that offshore purse strings have been loosened," said partner Simon Reed, and author of the report. He noted activity at the larger end of the market spanned a broad range of sectors including retail, property and resources.

"Private equity players are re-entering the upper end . . . it's a good mix of interest ." Mr Reed expected large listed targets will remain on alert for approaches as activity in that segment will be sustained or "see a slight uptick" this fiscal year. The report is released next week. It noted six of the 16 mega deals announced in the year to June 30, were competitive transactions, showing confidence is back in deal making.

Australian announced mergers and acquisitions so far this year were at their highest level since 2011, according to Dealogic.

Lower currency a factor

Mr Reed identified a lower local ­currency as a factor that would spur suitors to revisit Australian targets, many of which source large proportions of their income from offshore.

The report showed that mega deals accounted for 20 per cent of total activity, but the real driver was the smaller end – where targets were valued at less than $100 million – which accounted for 60 per cent of the transaction flow.

Mr Reed said there were notable opportunities in the remaining middle market for deals, following a hiatus in the segment, where targets were valued at between $100 million and $1 billion.

"The mid-market area can be a ­hotbed of activity and a target for private equity," he said. Vice-president of ­strategy at virtual dataroom company Intralinks, Matt Porzio is also ­optimistic on the outlook for deal ­activity in Australia and Asia Pacific.

"We are seeing good traction," he said during a visit to Sydney this week, agreeing that the middle market was primed for an increased deal flow.

"There is definitely a sense that there is a backlog in the middle market ."