Leaked data on mergers and acquisitions (M&A) boosts the average value of deals by $21 million, new research from Intralinks suggests.
The 2017 Intralinks Annual M&A Leaks Report revealed that in 2016, almost one in 10 (8.6 per cent) of global M&A deals were leaked ahead of any public announcement of the transaction. While similar to 2015 figures, the statistic represents a significant jump from a six-year low of six per cent in 2014. These results come despite the efforts of financial regulators to stamp out deal leaks and boost fines and penalties for market abuse and insider trading.
India topped the list of the top ten hotspots worldwide for deal leaks, with 16.7 per cent of the country’s deals being publicly leaked, followed by South Korea (16.1 per cent) and Japan (12 per cent). In comparison, the countries with the lowest rate of leaks include Canada (4.3 per cent), France (4.3 per cent) and the UK (7 per cent).
The Retail, Real Estate and Consumer reported the biggest problems with leaks, with the latter seeing its rate of deal leaks jump from 7.8 per cent in 2015 to 15.5 per cent in 2016. Meanwhile, Healthcare, Energy & Power and Industrials witnessed the fewest breaches.
So why do M&A deals leak? The answer lies in the higher target takeover premiums these leaks generate, resulting in higher valuations. As the Intralinks report highlights, this pattern has held true from 2009 to 2016 – during which time the median takeover premium for leaked deals has been 47 per cent for leaked deals vs. 27 per cent for non-leaked deals.
However, it’s not all bad news for businesses. Philip Whitchelo, Vice President of Strategy and Product Marketing at Intralinks, suggests the appeal of deal leaks may be waning.
“The rate of deal leaks in markets where leaking was rampant a decade ago, such as the UK, has reduced considerably: a reflection of new regulations against market abuse and much stricter regulatory enforcement.
“Countries such as India and Hong Kong, which have comparatively high levels of deal leaks, are also making more efforts to tackle market abuse and insider trading. Overall, against the perceived benefits, those leaking deals must also weigh the risks, and those benefits appear to have reduced in 2016,” he commented.
Subscribe to the Business Sale Report for access to more exclusive videos and inside track access to the latest deals and business sale opportunities. 
Founded in 2014, London-based IOTIC developed a novel platform (the “Platform”) to help organisations securely share and connect data across systems and teams. At its core is the Company’s proprietary “Digital Twin” technology, which creates virtual...
Specialising in the manufacture of cable and wire harnesses, the company provides a manufacturing facility which provides services such as wire stripping, electromechanical assembly, bespoke box builds, and modifications.
The business specialises in providing long-term, community-based care for individuals with complex physical and mental health needs. The company operates on a B2B basis, primarily focusing on providing support for individuals across the West Midlands...
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.