M&A Confidential -What Happens when Deals Leak
In the days leading up to a bid announcement, significant trading in the stock of the target company can be indicative of information leakage about the deal.
While not providing absolute confirmation of a leak in an individual case, significant pre-announcement trading (SPAT) across a large sample can be used to examine patterns and trends in leaking across time periods and geographies.
In the research study presented here, conducted by the M&A Research Centre at Cass Business School and commissioned by Intralinks, over 4,000 M&A transactions sourced from SDC Platinum between January 1st 2004 and October 16th 2012 were checked for SPAT activity using share and index price information from Thomson Reuters DataStream. In conjunction with this research, interviews with 30 M&A professionals were conducted by mergermarket to get a clearer picture on the motivations and deterrents associated with leaking and to provide context to the figures.