October 31, 2018

M&A Leaks Report: Loose Lips Cash In Lots More Chips

Intralinks’ recently released its annual “M&A Leaks Report.” Once again, the report makes for interesting reading – it analyzes deal leaks over the period from 2009-2017, and breaks them down by world region, country & business sector. The report also looks into the effect of leaks on the premiums paid, emergence of rival bidders & time to closing. Here are some of the highlights:

– Leaked deals have significantly higher premiums than non-leaked deals. In 2017, targets in leaked deals achieved a median takeover premium of 34% vs. 20% for non-leaked deals. This 14% spread was higher than in 2016, when the difference was around 12%.

– For the 10 countries with the most M&A activity, the top three for deal leaks in 2017 were Hong Kong (21%), India (14%) and the U.S.(9%). The bottom three countries for deal leaks in 2017 were France, Germany and South Korea – all of which had no deal leaks during the year.

– TMT(12%), Consumer (11%) & Retail (11%) were the leakiest industry sectors, while Financials (6%), Real Estate (6%) and Energy & Power (3%) were the most tight-lipped.

The study cautions that despite the economic incentive to leak, regulators worldwide are increasing regulatory and enforcement efforts against what they consider to be market abuse, including M&A deals leaks.

John Jenkins