Research conducted with the M&A Research
Centre at Cass Business School, London shows leaked deals on the
decline due to regulatory enforcement
Intralinks® Holdings Inc. (NYSE:IL), a leading, global SaaS
provider of secure enterprise content collaboration solutions,
today announced research showing the percentage of leaked M&A
deals fell to its lowest level in six years, due to stronger
regulatory enforcement, tighter internal governance, and the
increased risks to the transaction when leaking a deal. The
Intralinks M&A Leaks Report, conducted with the M&A
Research Centre at Cass Business School, London, examines more than
4,400 transactions from 2009 through 2014 and tracks and reports on
deal leaks globally.
“Overall, we’re seeing a drop in the volume of leaked deals,"
said Philip Whitchelo, vice president of strategy and product
marketing at Intralinks. “It’s clear from our research that
regulatory enforcement, internal governance and the risks to the
transactions are deterring more dealmakers from leaking deals. As a
result, sellers and their advisers are taking the issue of
pre-announcement deal confidentiality much more seriously.”
In the last two years, there has been a significant rise in
enforcement actions and fines for market abuse1. For regulators in
major economies, such as the US and Europe, the average size of a
fine has increased by 18 times over the past five years.
As regulatory enforcement gathers pace, the Securities and
Exchange Commission (SEC) announced enforcement results for the
fiscal year 2015 on October 22nd. Chair Mary Jo White is quoted
stating, “Vigorous and comprehensive enforcement protects investors
and reassures them that our financial markets operate with
integrity and transparency, and the Commission continues that
enforcement approach by bringing innovative cases holding
executives and companies accountable for their wrongdoing sending
clear warnings to would-be violators.”
With regulators clamping down on market abuse, the Intralinks
M&A Leaks report examined significant pre-announcement trading
in the shares of a target company in the days leading up to the bid
announcement, which is highly indicative of information leakage.
Key findings from the research include:
- The number of deal leaks has been
fallingDeal leaks have fallen globally to a six-year low in
2014. Six percent of all deals in 2014 involved a leak prior to
public announcement, compared to 8.8% in 2013, or an average of
7.4% over the six-year period.
- EMEA leads in leaking deals, despite
record declines Deals in Europe, the Middle East and Africa
(EMEA) showed the highest average percentage of leaked deals at
9.2%, whereas North American deals showed the lowest average
percentage of leaked deals at 6.3%. In 2014, however, deal leaks in
EMEA fell to the lowest percentage for the period, at 3.8%, and
EMEA had the lowest percentage of deal leaks of the four global
regions.
- Top 3 leakiest locationsA
geographical breakdown for deal leaks over the entire six-year
period showed the most leaked deals in Hong Kong (18.6%), India
(15.2%) and the UK (14.1%). Australia had the lowest percentage of
deal leaks over the period, at 3.5%, while the U.S., at 6.6%, had
the median percentage of leaked deals.
- Leaked deals that close have higher
takeover premiumsOver the entire time period, the median
takeover premium for targets in completed leaked deals was 51.2%
compared to 29.2% for non-leaked deals, a difference of 22
percentage points. This may be due to leaked deals having a higher
tendency of attracting rival bids. Over the entire time period,
7.3% of leaked deals attracted a rival bid compared to 6.1% of
non-leaked deals.
“Various market abuse scandals have caused reputational
damage and resulted in significant corporate fines and even
convictions of individuals over the last few years,” said Professor
Scott Moeller, director of the M&A Research Centre, Cass
Business School. “Combined with an increasing regulatory
enforcement environment, the risks associated with leaking a deal
now far outweigh the perceived benefits.”
To get a free copy of the Intralinks M&A Leaks
Report, click here.
Methodology
In the days leading up to a bid announcement, significant
trading in the shares of the target company can be indicative of
information leakage about the deal. While not providing absolute
confirmation of a leak in an individual deal, significant
pre-announcement trading (SPAT) across a large sample can be used
to examine patterns and trends in leaking across time periods and
geographies.
M&A transaction data involving announced deals during the
period 1 January 2009 to 31 December 2014, share price and index
price information were sourced from Thomson Reuters. Only
transactions involving a change of control of the target were
analyzed. The final sample, comprising 4,475 deals, also excluded
bids for targets without sufficient equity trading records (where
the return for the target equity was zero for more than half the
total period under consideration). All references to the region or
country location of the target refers to the target’s primary
listing location.
About Cass Business School and the M&A Research
Centre
Cass Business School, which is part of City University London,
delivers innovative, relevant and forward-looking education,
consultancy and research. Located in the heart of one of the
world’s leading financial centres, Cass is the business school for
the City of London.
MARC is the Mergers and Acquisitions Research Centre at Cass
Business School - the first research centre at a major business
school to pursue focused leading-edge research into the global
mergers and acquisitions industry. MARC blends the expertise of key
M&A market participants with the academic excellence of Cass to
provide fresh insights into the world of dealmaking.
About Intralinks
Intralinks Holdings, Inc. (NYSE:IL) is a leading, global
technology provider of secure enterprise content collaboration
solutions. Through innovative Software-as-a-Service solutions,
Intralinks software is designed to enable the exchange and control
of information between organizations securely and compliantly when
working through the firewall. More than 3.1 million professionals
at 99% of the Fortune 1000 companies have depended on Intralinks'
experience. With a track record of enabling high-stakes
transactions and business collaborations valued at more than $28.1
trillion, Intralinks is a trusted provider of easy-to-use,
enterprise strength, cloud-based collaboration solutions. For more
information, visit www.intralinks.com.
Forward Looking Statements
The forward-looking statements contained in this press release
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are express or implied statements that are not based on
historical information and include, among other things, statements
concerning Intralinks’ plans, intentions, expectations,
projections, hopes, beliefs, objectives, goals and strategies.
These statements are neither promises nor guarantees, but are
subject to a variety of risks and uncertainties, many of which are
beyond our control and could cause actual results to differ
materially from those contemplated in these forward-looking
statements. Accordingly, there can be no assurance that the results
or commitments expressed, projected or implied by any
forward-looking statements will be achieved, and readers are
cautioned not to place undue reliance on any forward-looking
statements. The forward-looking statements in this press release
speak only as of the date hereof. As such, Intralinks undertakes no
obligation to update or revise the information contained in this
press release, whether as a result of new information, future
events or circumstances or otherwise. For a detailed list of the
factors and risks that could affect Intralinks’ financial results,
please refer to Intralinks Holdings, Inc.’s public filings with the
Securities and Exchange Commission from time to time, including its
Annual Report on Form 10-K for the year-ended December 31, 2014 and
subsequent quarterly reports.
Trademarks and Copyright
“Intralinks” and Intralinks’ stylized logo are the registered
trademarks of Intralinks, Inc. This press release may also refer to
trade names and trademarks of other organizations without reference
to their status as registered trademarks. © 2015 Intralinks,
Inc.
1 Global Enforcement Review 2015, Duff & Phelps
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151119005145/en/
Intralinks Holdings, Inc.Media:Ian Bruce,
508-574-2016ibruce@intralinks.comInvestors:Dean Ridlon,
617-607-3957dridlon@intralinks.com
Intralinks Holdings $0.001 Par Value (delisted) (NYSE:IL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Intralinks Holdings $0.001 Par Value (delisted) (NYSE:IL)
Historical Stock Chart
From Jul 2023 to Jul 2024