2018 Intralinks Annual M&A Leaks Report Indicates Increased Regulatory Scrutiny, Efforts to Prevent Market Abuse Having Desired Effect
NEW YORK, Oct. 9, 2018 /PRNewswire/ -- Intralinks®, the world's leading virtual data room (VDR) provider, announced today that 8% of worldwide mergers and acquisitions (M&A) in 2017 were leaked prior to announcement, down from 8.6% of all such deals in 2016. The finding from the 2018 Intralinks Annual M&A Leaks Report, the analysis for which was conducted by the M&A Research Centre at Cass Business School, City, University of London, indicates increased efforts by financial services regulators worldwide to prevent market abuse are beginning to pay off.
While the report found that the rate of deal leaks decreased in both the Americas and Europe in 2017, it increased in the Asia-Pacific (APAC) region to 10.8% of all deals, up from 9.7% of all deals the previous year. The percentage of leaked deals in Hong Kong more than doubled in 2017 to 20.8%, up from 10% in 2016.
"While deal leaking decreased in both the Americas and Europe in 2017, the Asia-Pacific region continued to buck that trend, making APAC the region with the highest rate of deals leaks for the second consecutive year. This is probably a reflection of a combination of a greater cultural tolerance of deal leaking and a less well-developed regulatory and enforcement environment compared to Europe and North America," said Philip Whitchelo, Intralinks' vice president for strategic business development. "As markets globally continue to align their regulatory standards and increase their levels of enforcement, we can expect to see the downward trend in worldwide deal leaks to continue."
The report also found that for the ten countries with the most M&A activity in 2017, the top three for deal leaks were Hong Kong, India and the U.S. Meanwhile, France, Germany and South Korea had no deal leaks. Hong Kong and Canada increased their rate of deal leaks over the previous year, while India, the U.S., Japan, Australia, the U.K., France, Germany and South Korea all reduced their rate of deal leaks in 2017.
Other key findings include:
- In 2017, the Technology, Media and Telecoms sector saw the highest rate of deal leaks at 12.1%, followed closely by the Consumer sector (11.3%), and the Retail sector (11.1%).
- In 2017, leaked deals continued to have significantly higher takeover premiums (34.4%) compared to non-leaked deals (20.6%). The difference in the median takeover premium for leaked deals compared to non-leaked deals was US$7.7 million.
- In 2017, the rate of rival bids for targets in leaked deals (1%) was lower than the rate of rival bids for non-leaked deals (4.4%) for the second consecutive year.
- In 2017, the completion success rate for leaked deals was marginally higher at 92% versus a 91% completion success rate for non-leaked deals.
- In 2017, leaked deals took 20% less time from announcement to completion than non-leaked deals.
The 2018 Intralinks Annual M&A Leaks Report can be viewed at https://www.intralinks.com/insights/publication/2018-ma-leaks-report.
Intralinks is a leading financial technology provider for the global banking, deal making and capital markets communities. As pioneers of the virtual data room, Intralinks enables and secures the flow of information facilitating strategic initiatives such as mergers and acquisitions, capital raising and investor reporting. In its 22-year history Intralinks has earned the trust and business of more than 99 percent of the Fortune 1000 and has executed over US$34.7 trillion worth of financial transactions on its platform. For more information, visit www.intralinks.com.
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