DealLawyers.com Blog

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 2009-2019, 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:

– Globally, the rate of M&A deal leaks increased to 8.7 percent in 2019, the first rise in four years and the second-highest level of leaked deal activity since the start of Intralinks’ study in 2009.

– This increase was driven primarily by the EMEA region where the percentage of deals involving abnormally high levels of trading immediately pre-announcement increased by 75%t year on year, from 5.8% to 10.2% in 2019.

– The leakiest countries last year were South Korea, Germany and the U.K. Germany & the U.K.’s gabbiness explains why the EMEA region had the biggest relative share of leaks in 2019.

The leakiest industry sectors were were Energy & Power, Healthcare and Industrials, all of which saw an increase in their rate of leaked deals. The only other industry which upped its rate of leaks was TMT.

– The bottom three sectors for deal leaks were Real Estate, Materials and Retail. These bottom three industries all showed annual falls in their deal leak rates.

One recurring theme of the annual survey is that leaky deals have always exceeded their more stealthy counterparts when it comes to takeover premiums. From 2009-2018 the median takeover premium for leaked deals was 44% vs. 25% for non-leaked deals, a difference of approximately 19 percentage points. In 2019, the median takeover premium for targets in leaked deals was 48% compared with 23%  for non-leaked deals, a gap of 25 percentage points.  That gap was essentially the same as that experienced in 2018, where leaked deals had a median takeover premium of 45% and non-leaked deals had a medium premium of 20%.

– John Jenkins