Cracks found in Aus M&A but positive overall
A new report has found that the percentage of leaked Australian M&A deals has increased to 3 per cent over the course of 12 months, but remains well under the global average.
According to research by Intralinks and Cass Business School, University of London, the percentage of M&A deals leaked prior to their public announcement in the year 2015 increased to 3.0 per cent of all deals in Australia, and rose to 8.6 per cent of all deals globally that same year.
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Year-on-year, Australia’s results represent an increase of one percentage point from 2014, where 2.0 per cent of deals were leaked prior to announcement.
“Australia’s relatively low level of leaks can be attributed to a notable recent trend of increasing regulation and enforcement by the market regulator, as well as a spotlight on high profile cases of market abuse in the media,” the report noted.
“ASIC has had an active and ongoing focus on monitoring market cleanliness and integrity in Australia for the past 10 years – pursuing 42 separate insider-trading cases, with 34 successful enforcement outcomes.
“ASIC itself points to quicker identification and prosecution of cases due to enhanced data gathering and surveillance powers, as well as closer working relationships with law enforcement agencies in order to bring about rapid outcomes of high profile insider trading cases, including those of Lukas Kamay and Christopher Hill, Oliver Curtis and Steven Xiao.
“However, an inquiry by the Senate standing committees on economics, focusing on the inconsistencies and inadequacies of Australia's current criminal and civil penalties for corporate and financial misconduct or white-collar crime, reports that there is an under-reporting of corporate crime in Australia and that tougher penalties are needed. The slight uptick in Australian M&A deal leaks in 2015 highlighted in the Intralinks Annual M&A Leaks Report suggests a continued focus is needed.”
The report found that the top three countries for deal leaks in 2015 were India with 20 per cent, Hong Kong with 12.9 per cent and the United States with 12.6 per cent.
Meanwhile, the bottom three countries for deal leaks in 2015 were France and Germany with both having no deals leaked, followed by Australia with 3.0 per cent.
The report also found that the top three sectors for deal leaks in 2015 were real estate with 12.9 per cent, healthcare with 12.5 per cent and energy and power with 9.6 per cent.
The results in the latest Intralinks Annual M&A Leaks Report are based on an analysis of 5,024 deal announcements between 2009 and 2015, of which 378 were identified as leaked deals.