After reaching a six year low in 2014, the number of M&A deal leaks
globally increased in 2015, according to recent research conducted by
Intralinks and the M&A Research Centre
(MARC) at Cass Business School. The 2016 Intralinks Annual M&A Leaks Report examined over 5,000
transactions globally from 2009 to 2015, looking for unique signals that
indicate M&A deal leaks.
It found that 8.6% of all global M&A deals in 2015 were subject to leaks
prior to their public announcement. The increase in leaks comes despite an
increased effort by regulatory authorities to combat insider trading. The US
saw a sharp rise in the incidence of leaks, from 8% to 13%. In the UK 7% of all
deals were subject to leaks, an increase on the 5% recorded in 2014. India was
found to have the highest incidence of deal leaks, with the former incumbent of
the top spot, Hong Kong, successfully reducing the percentage of deal leaks
from 22% in 2014 to 13% in 2015. Despite this improvement it still had the
second highest incidence of leaks.
The report concludes that the benefits of leaking deals, which include the
encouragement of rival bids and the likely increase in the target's valuation,
are temptations that can outweigh the fear of regulatory enforcement and
financial penalties. However, the report also predicts that the long-term trend
in leaks will continue to decrease, as the tougher regulatory environment and
new market abuse regulations in Europe begin to take effect.
Intralinks, Inc., an indirect wholly-owned subsidiary of Synchronoss
Technologies, Inc. (NASDAQ: SNCR), is the leading global provider of software
and services, including Virtual Data Rooms, for buy-side and sell-side M&A
deal management, alternative investments fundraising and reporting, syndicated
loan lifecycle management, as well as enterprise collaboration. For more
information, visit www.intralinks.com.
The Cass M&A Research Centre (MARC),
founded in 2008, is the only research centre at any major business school
focused on both the research and practice of M&A.