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Most M&A leaks intentional: report

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By James Mitchell
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2 minute read

A majority of leaks about M&A deals are an intentional ploy by the seller to gain a competitive advantage, according to a new report. 

Released yesterday, When no one knows: Pre-announcement M&A activity and its effect on M&A outcomes found that leaking a deal is one of the tactics used by the seller to make the buyer speed up the due diligence process.

The study – conducted by London City University’s Cass Business School and Intralinks – provides empirical new evidence on previously unanswered questions about the interplay and competitive tensions between both sides of corporate deal making. 

“If we combine the results of this particular study with the results of the previous study we did together with Intralinks – a study on market leaks – you could suggest that if the seller did an intentional leak to the market, that would put additional pressure on the buyer, who would then be worried that perhaps because of the leak another buyer might come in or that might end up making the deal less likely to complete,” Cass Business School M&A Reseach Centre director Scott Moeller said.

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Intralinks vice president of product and marketing, M&A, Philip Whitchelo said leaks are intentional and are being done by someone to gain some type of advantage.

“It is quite nice that this study has been able to tie up that question,” he said.

Ernst & Young’s Neil Hutt said you can generally tell a leak is intentional as opposed to accidental because all the facts are right. 

“We see gossip, we see rumours and we see that some of them are true and some of them aren’t,” Mr Hutt said.

“When something hits the press and every single fact is right and it is all spot on, you know it was an intentional leak.”

 

Most M&A leaks intentional: report

A majority of leaks about M&A deals are an intentional ploy by the seller to gain a competitive advantage, according to a new report. 

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