Number of Leaked M&A Deals Rises Despite Tougher Regulations

Abstract

The percentage of merger & acquisition deals leaked prior to their public announcement increased to 8.6% globally in 2015, according to new research published by Intralinks and Cass Business School, City, University of London. Canada ranked 4th with 12.5%, and both the US and Canada suffered significantly increased incidences of...

The percentage of merger & acquisition deals leaked prior to their public announcement increased to 8.6% globally in 2015, according to new research published by Intralinks and Cass Business School, City, University of London.

This represents an increase of 2.6 percentage points from 2014, when 6% of deals leaked prior to announcement, despite a general trend towards tougher regulations and enforcement by financial services regulators globally.

These are some of the findings of the latest Intralinks Annual M&A Leaks Report, the analysis for which was carried out by the M&A Research Centre at the University of London’s Cass Business School and Intralinks, provider of M&A deal management and secure content collaboration solutions.

The report is based on an analysis of 5,024 deals announced between 2009 and 2015, of which 378 were identified as leaked deals.

North America (NA) had the highest percentage of deal leaks in 2015 (12.6%), followed by Asia Pacific (APAC, 7.2%) and Europe, the Middle East & Africa (EMEA, 5.9%).

Top 3 countries for deal leaks

The top three countries for deal leaks in 2015 were India (20%), Hong Kong (12.9%) and the United States (12.6%).

Canada ranked 4th with 12.5%, and both the US and Canada suffered significantly increased incidences of deal leaks in 2015 compared to both 2014 and their long term averages.

Both countries also trended well above the global average of 7.5%.

The UK ranks in 5th place for deal leaks in 2015 at 6.7% of all deals leaked, which means it is trending below its long term average from 2009-2015 (13.3%).

The top three sectors for deal leaks in 2015 were real estate (12.9%), healthcare (12.5%) and energy & power (9.3%).

The median deal premium for targets in leaked deals in 2015 was 53%, compared to a median deal premium of 24% for non-leaked deals, a difference of 29 percentage points.

Targets in leaked deals in 2015 attracted rival bids in 6.4% of cases, compared to 4.4% of cases for non-leaked deals.

Credit: By CFO Innovation Asia Staff