Date
24 September 2017
Information about an average 18.6 percent of all deals involving Hong Kong-listed targets seeped out prematurely during the period covered by the survey. Photo: internet
Information about an average 18.6 percent of all deals involving Hong Kong-listed targets seeped out prematurely during the period covered by the survey. Photo: internet

HK has worst record for leaks on mergers, takeovers

A crackdown on white-collar crime in the financial industry has helped reduce the leaking of information on M&A deals before they are made public to the lowest level since the financial crisis, Reuters reported, citing a survey.

Hong Kong was the world’s leakiest market, the survey, conducted by Britain’s Cass Business School, found.

Last year, just 6 percent of merger and acquisition deals worldwide suffered leaks, against an average of 7.4 percent in 2009-2014, the survey found. 

It said the overall fall in leaks was due to tighter regulation and internal governance, as well as the increased risks that a leak presents to a transaction.

The survey measured significant price rises in the shares of a target company in the weeks before a deal officially emerged.

It found that the leakiest market was Hong Kong, where information on an average 18.6 percent of all deals involving Hong Kong-listed targets seeped out prematurely.

That was followed by India (15.2 percent) and Britain (14.1 percent).

Leaks in the United States, the world’s hottest M&A market, average about 6.6 percent of deals, while Australian dealmakers are the tightest-lipped, with just 3.5 percent of transactions leaked.

The survey also showed that the takeover premium paid by acquirers was significantly higher when a deal was leaked.

– Contact us at [email protected]

FL

EJI Weekly Newsletter

Please click here to unsubscribe