Inside M&A Leaks: New Research on Risk, Value and Deal Outcomes

Russell Enright

00:05 - 01:26

Hello, everyone, and welcome to our latest webinar, inside m and a leaks, new research on risk, value, and deal outcomes. This session is due to last for an hour, so we're hoping to have fifty minutes of discussion and allow ten minutes at the end for questions.

You can use the chat panel on the right hand side to talk with other attendees or the q and a tab if you wanna send questions to our speakers. There'll also be two polls throughout the session, so we wanna engage the audience.

Please take a moment to join in when they appear. So today, we're diving into the data behind our latest m and a deal leaks report produced in partnership with the Bayes Business School.

We partnered with Bayes for seventeen years now, and this research matters to a wide range of people from dealmakers and advisers to in house councils and boards weighing up how to protect a deal before it's announced. I'm pleased to be joined today by professor Scott Muller, founder of the m and a research center, and doctor Valeria Viktava, who is the associate professor of finance at the Bayes Business School.

Val, to kick us off, can you briefly explain the difference between an intentional nonintentional leak?

Valeriya Vitkova

01:26 - 03:55

Yeah. So I think this is a very useful distinction, and you can think of what we measure as the footprint, not the motive.

So a non intentional leak is information escaping despite everyone's best efforts. The circle of people who needs to know has become large.

It could be that somebody talked to a spouse or a colleague. It could be that a document went through the wrong distribution list.

It could be that a junior person at the financial provider worked out what the project name refers to. So in all of these scenarios, nobody decided to release anything.

There was simply more ways for information to come out than anybody has counted. Whereas an intentional leak, on the other hand, is information being released because releasing it serves someone's purpose.

So this could be a seller wanting to flush out a second bidder. This could be a buyer applying public pressure to a board that has said no.

This could be a sponsor building financing support, or it could be somebody inside the acquirer who thinks that the deal is a bad idea, and they just want it to die. And one reason why I think this distinction matters is that the remedies that we can use to prevent leaks are completely different depending on the type of leak that we're dealing, with.

So you can think of a nonintentional leak as a controls problem. So you can implement tighter measures.

You can have smaller circle of parties involved. You can be quite strict about who joins the circle of people and when.

But if it's an incentives problem, then no amount of technology may be able to fix it because the person releasing the information may be authorized to have it. And I would add a third category, which I think often gets folded into the first two categories.

So sometimes a share price can move before the announcement, and nobody leaked any information. So it could be that the sector is consolidating, and the target is obviously the next candidate.

It could be activists already on the register of the target. So in all of these cases, the market simply worked it out.

Russell Enright

03:55 - 04:06

Interesting. Thank you very much, Val.

Scott, perhaps you could share with us where global leak activity stands today and when where we're seeing the biggest shifts.

Professor Scott Moeller

04:06 - 09:09

Yes. And, it's important to note here's a slide, to just show you here on this.

We have been doing this for seventeen years. On average, it looks like about 8% of all deals have some sort of leak to the market in the way that Val actually, discussed it just now.

We're at a higher level last year and this year. And in fact, this year, the new figure is 8.

9% of all deals leak. You know, that, when you think about it, is one in eleven deals.

Last year, it was, closer to 10%, 9. 5%.

So down a little bit, but I think that's actually just noise in the market. No particular reason there.

Remarkably, if you look at this over time, it's been very steady. There were some outliers, back around 2012, 2014.

But even then, it came back, to where we seem to have this normal level of about one in every 12 deals leaking, which, as I said, seems to be quite consistent every year. If we look at it regionally, we see more differences.

Although, again, this might be more of a spaghetti chart, than anything else because although you'll see that, Asia Pac has been highest for the past three years and is actually quite high, this year, on the chart, Asia Pac, coming in at 11%, this year, down from 12% last year, You'll see that generally speaking, these go back and forth. So, there's been times when North America has been highest.

Look back at 2015. There's been times when Europe was highest, which, you know, was back around two thousand seventeen, eighteen.

And when you excuse me. Europe, way back in the beginning when we had this, you know, here back in two thousand nine, ten, eleven, twelve, thirteen.

And I think so I think it's important not to read too much into this year right now. And I think more interesting is if you look at it country by country.

And when you look at it country by country, you see quite some consistency, but also quite some outliers. In 2025, 20% of the deals in Hong Kong had some sort of leakage.

That's one of the highest figures, in fact, it is, that that we've seen. And in fact, the only higher figure was a figure which is in a slightly different font here for France, which was last year.

But that's because we had a very small number of deals, which is why they're in that different, font size. So I wouldn't put too much weight on that.

Second last year was The UK. The UK has been much better.

In fact, The UK was quite, a bit down in the charts, meaning high level. When you look back at the beginning when we were looking at this, last year was quite high as well.

And then India came in third. And then you have quite a drop off, to where the others are.

Over time, though, because, again, I wouldn't place too much weight on year by year changes, but over time, it's really been Hong Kong, South Korea, and India, you know, that have had the highest level of leakage that we've seen. Now, again, this only ranks the top 10, that we have here.

There's some countries that that might be smaller. But, again, when you get down to some of the smaller, to the countries that have smaller number of deals, it becomes more much, much more volatile just because you have that much smaller number of deals, on on this.

And then lastly, just in terms of the overall figures, to give everybody an idea, is looking at sector. Here again, you know, some interesting, things here.

Industrials was highest this year with some close to 15% of all deals, having leaked. Second was consumer.

And then there's quite a drop off and, and then not much spread when you get down to the three, four, five, six, seven, and so on, on that. So it really was a year last year where the leakage, was strongest most in industrials and consumer.

That's not necessarily the way, you know, these these have been over time. Although, interestingly enough, when we do look at the full sample, it TNT comes in number one.

You know, the most active sector, that that we've seen, not just in leaks, but in terms of deal activity, also turns out to be the sector that has the highest percentage of deal leaks over time. But then industrials, and consumer came in second and third over time.

They, of course, being the number one and number two this year.

Russell Enright

09:09 - 09:19

Scott, what you've been doing this study for a while now. What stands out for you most in this year's data? Are leaks becoming the new normal, do you think?

Professor Scott Moeller

09:19 - 10:18

Well, I'm not necessarily sure, Russell, that we could say it's becoming the new normal because it's been normal, and that eight that approximately 8%, one out of every 12 years, has been remarkably consistent over time. What we do see is that depending on sector, depending on country, we'll see some variation.

But even there, there tends to be regression back to the mean for each one of those countries, for each one of those, sectors, you know, over time. And I guess you can probably even say that regionally, because regionally, over time, Europe and Asia have been more leaky than The United States.

That might be because, at least historically, perhaps not today, you know, there's been greater enforcement, you know, back in The US. And, of course, The US dominates the, you know, the the the North American figures that we're showing there for the Americans.

Russell Enright

10:18 - 10:27

You mentioned Europe and Asia. Why do you think this year in '20 well, last year in 2025, Hong Kong, The UK, and India saw such a jump?

Professor Scott Moeller

10:27 - 11:13

Yeah. I I I think that has to do with the amount of activity that's taking place.

We do see some correlation between where there's level of deal activity and there's leakage. Just as I was just mentioning about the sector, you know, historically, the most leaky sector is TMP, at least in the time frame, the past seventeen years that we've been looking at.

And we know that, of course, the TMP sector has been driving a lot of the market activity during that period of time. And the same thing would be true country by country.

When you begin to have a country that becomes hot, you know, then you begin to see more leakage activity. It's not a weak, I mean, it's it's it's not a very strong correlation between those, but it is a weak correlation that's there.

Russell Enright

11:13 - 11:18

Why do you think industrials overtook TMT as the leakiest sector this year? What's behind that?

Professor Scott Moeller

11:18 - 12:22

Yeah. That's a good question.

We were actually expecting to see, TMT back up there as a number one. And, actually, if you look at this particular chart, you'll see in 2025, you know, that it declined quite significantly from having been the number one, you know, for the prior year and a at least on this chart showing a record number, you know, last year for TMT.

I I I think part of the reason why on that might be that the deals themselves in TMT have been getting a lot bigger with what's going on, you know, in the sector and being dominated by by, by deals, you know, in the AI and AI related, areas, but also in space, aerospace, defense, and so on. Those tend to be very large deals.

And, you know, we we do see some, you know, we we, therefore, will be seeing fewer deals from a value perspective as opposed to from the value perspective.

Russell Enright

12:22 - 12:34

Okay. Great.

Okay. Perhaps now, let's get the audience involved, shall we? Let's do a poll.

Scott, would you like to, take us through the first poll of the day?

Professor Scott Moeller

12:34 - 15:48

Yeah. Well, our our poll is why we've been trying to look at additional things in this report.

When we first started out doing this report, we were pretty much looking at it just with the data that we showed you, that I showed you already here. Nicely, Vowel's going to be giving us a lot more data, and that's to try to find out why a lot of what's happening, some of what your questions were to me just now, Russell, but why this is happening this way.

And I guess the poll that we have, we'd like to put up is one to talk about what different things are out there that might be driving deal activity. So we, wanted to put a poll up to ask everybody where you think leaks originate.

Where and why are these deals who is actually, driving the leakage here? So maybe we can put that poll up now, and you can see it there. And if everybody could just put in your vote, tell us what you're seeing, what where you think it is.

And one additional point, if anybody does, nobody has yet, but if anybody does vote for other, it'd be great if you could put it in the chat to let us know what you were thinking about on the other. Got a few more votes coming in.

To the best of my knowledge, nobody's going to be able to track what you actually say here. Okay.

Why don't I I'll give you a countdown. You've got five, four, three, two, one.

Okay. Let's close it.

Although, I didn't see where that was then. But it looked to me, where it came out, I didn't see the actual percentages.

Yeah. There we go.

I mean, obviously, overwhelmingly, you know, the top two internal employees or management or advisers or intermediaries. I guess, from everybody's perspective who's answered that way, you know, it's not from the investment side.

We're gonna show you a little bit of data about whether, in fact, a deal makes puts a higher premium on a target than a non LEAP deal. And I guess there's not too many people who think that it would be the regulators or any industry bodies doing it.

But internal employees or management, and again, that could be the way Val said that it was intentional, that somebody was trying to intentionally leak in order to be able to get more activity or interest in a target. And that could have been done through the advisers or intermediaries, on there as well.

But we are thinking ourselves now, aren't we, of of how we can try to track whether, in fact, you know, where some of these sources might come from on this,.

Valeriya Vitkova

15:48 - 15:49

Yeah.

Professor Scott Moeller

15:49 - 15:49

going. through.

Valeriya Vitkova

15:49 - 15:55

Absolutely. So we may have some updates for the follow-up record next year on that.

Professor Scott Moeller

15:55 - 15:58

Right. Okay.

Thank you very much on that.

Russell Enright

15:58 - 16:12

1. Thank you, Scott.

Let's let's move on to, deal outcomes now. Val, can you walk us through how leaked and non leaked deals compare once a deal is announced?

Valeriya Vitkova

16:12 - 20:35

Yeah. Absolutely.

So Scott has given you the scale of the problem, but we also wanna know what is the costs. So what does the, the deal itself, cost depending on whether there was a leak or not? And in that relation, the most interesting finding here is about due premiums.

So what we find is that in 2025, the median takeover premium on the deal that leaked, was 50. 2%.

While on a deal that stayed confidential, that was 28. 6%.

And we can think of this as the dollar or absolute value. So the median premium of leaked deals was 60, million dollars against a $35,000,000 for nonleague deals.

So, we see that this is a fairly, substantial gap. And if we look at this over the full sample, so over the seventeen years that we've been, running this, study, this finding is, fairly consistent.

So it has appeared in every single year of the study. So what we can conclude is that a leak is expensive, and it is expensive for the buyer specifically.

So that's roughly 20 percentage points of premium. And on a transaction of any size, I think that's fairly significant.

Another question would be what is driving this difference this difference in premiums? So a typical explanation may be that there's more competition in the market for the same target. So the leak flushes out, rival be this, an auction develops, and then the price goes up.

However, the data doesn't support this. So what we find, from our analysis is that leaked deals, attracted about 6.

5% of competing offers. Non leaked deals attracted 6.

2%. So what we see is that there is no significant difference, in terms of attracting rival bids between leaked and non leaked transactions.

So we wanna come back to the possible, explanation, for this. And so looking at other aspects of the deal that may be impacted by, a leak, we looked at the timing and the completion of deals.

And, what we see is that in 2025, the number shows that leaked deals completed slightly faster compared to non leaked deals. So for leaked deals, that was eighty eight days against ninety three days, for, nonleague deals.

And then in terms of completion rates, we see that we have 88. 5% against 83, four per 4%.

If you look at the overall data over the seventeen years, and if we can see the the rate of completion and the time of completion, we actually see that, essentially, there is no, significant difference. So the completion rate and the time it takes for a deal to complete is, essentially very similar depending on whether, there was a leak or not.

So if I can summarize, basically, the outcome picture in one sentence here is that we can say that a leak costs the buyer a great deal of money in terms of the premium, but there is no evidence that there is any kind of measurable cost for the seller based on, completion rates or time to completion.

Russell Enright

20:35 - 20:48

Val, you mentioned the timeline, has flipped and the completion data flipped this year compared with 2024. Do you think that's just noise, or is it a real shift?

Valeriya Vitkova

20:48 - 22:54

Yeah. That's right.

So I think, the data has flipped, and I would say it's more likely noise. And I think there's probably a number of different explanations for this.

So the annual figures, and this whole sample figures, which is the seventeen year data, I think they answer different questions. And you want to know both in a way.

So if we take the annual numbers first, the 2025 numbers, tell us what actually happened in last year's sample of leaked m and a transactions, and that is worth knowing. So what one single year's number cannot tell us, however, is whether this was caused by the leak itself because our leak sample in every in every single year is, fairly small compared to all the deals that are announced.

And if you look at what has changed this year, I think that there is actually something interesting there. So last year's leaked deals were considerably larger than this year's.

The deal size, was one of the biggest factors that was influencing this. So, potentially, what we're seeing in the timing data here could be a side effect.

So what we wanna think about here is that one year's data cannot tell us whether a movement is a change in behavior, or whether it's just the composition of transactions that were associated with leaks. So for a real shift in behavior, we wanna look at the overall sample.

So this is why I think it was actually, a blip, and it was driven by the characteristics of those deals that were associated with leaks.

Russell Enright

22:54 - 23:11

Thank you, Val. I saw while you were presenting, we had a question, from Constantine.

And Scott has answered it in the chat. But, Scott, do you just wanna elaborate on your answer for the audience?

Professor Scott Moeller

23:11 - 23:26

Yeah. No.

The question came through about how we measure premium and whether it's relative to the undisturbed share price. And as I put in the chat, yes.

It is, relative to the undisturbed share price. That's how we calculate this.

Russell Enright

23:26 - 23:45

Good. Okay.

Thank you, Scott. Thank you for the question.

We'll come to more questions at the end. So, we thought we'd get that one quickly while I was on the on the point.

But look, as we've been, taking a question from the audience already, let's go to another poll. So I think we have one this time that you're gonna lead off with.

Valeriya Vitkova

23:45 - 25:26

Yeah. So we have another poll, for the audience, and.

what we wanna look at, the this time is what do you think are, the biggest factors that influence, the risk of a leak? And we've got a number of options here. And I think that that would be very interesting to see what the audience think is the factors that are associated with the biggest risk.

I think we're maybe we wanna give just a couple of seconds, for everyone to finish voting, and then we can share the final answers.

Russell Enright

25:26 - 25:45

Mhmm.

Valeriya Vitkova

25:45 - 37:22

1. So I think we can probably close the pool now and, report the responses that we have.

So what I'm seeing is that, actually, the audience has it, right in the sense that, what they suggest is that the number of advisers involved, has one of the biggest, effects on, deal risk. And this leads, really nicely to what our data, has found based on our analysis.

So what you have, here on the slide, if we can share the findings, is that, actually, one of the largest effects is related to advisers, which is what the audience also thought. So the largest gap in terms of leak rates, we find is depending on the number of find advisers.

So acquirers who used two or more financial advisers have a leak rate of about 12%. That's against our sample average of 8%.

And nothing else that we've measured comes close to that. So the reason why I think this is the adviser count rather than headcount or number of employees, is generally because we've looked at different types of advisers.

So when we look at the acquirers legal advisers, actually, we don't see any difference in terms of the leak rates. Similarly, when we look at the target side and we're looking at financial advisers, we see basically, no difference there.

Same for legal advisers on the target side. So the one type of adviser that appears to be, giving a significantly different result here is the buy side financial adviser group.

And I do think there's a plausible explanation here, because if we think about the reason why we may get a second bank in both on the buy side is usually a financing role, rather than, for example, second opinion on value or other other areas. So here we're looking at the network of lenders growing, the network of co underwriters growing, rating agencies, anything that, effectively can result in information inadvertently escaping the circle.

The second largest gap, is in relation to how the deal is paid for. And what we see here is that cash deals leak at 8.

8% versus deals where we pay with stock, which is 5. 5%.

And you can think of this as one of the largest proportional differences in our studies, and it surprised us a little bit. And I think there's possibly, two explanations here.

So the first one is to do with the financing. So what it means is that you expand the circle of parties, involved in the financing of the transaction, and we've already, discussed that.

So number of lenders, number of co underwriters, and so on. But I actually think there is another possible explanation, which is about the trade itself if you think about merger arbitragers.

So if you know about a cash offer, you have a simple certain payoff. You buy the target, and then you collect the difference why when the deal is closed.

However, if you know about the stock offer, you're being paid in terms of the exchange ratio in the transaction. So to lock in the gain in that trade, it means that you also need to short the acquirer stock, which carries its own costs and its own risks.

And it's important to mention here that insiders, dealing in transactions is illegal, and that's in every market that we look at. But for somebody doing this anyway, a cash deal is simply a better trade in this, in this scenario.

The next effect that we look at is the deal size. And what we see is that the largest quarter transactions, that leak is 9.

8%. So in terms of transactions that are large, the largest ones in our sample, they're associated with 9.

8% leak rate. Whereas the smallest transactions in our sample are associated with 7.

4% leak rate. So size here appears to be one of the most robust predictors, in our study, and it actually survives most of the ways that we cut the data.

A likely explanation here is potentially a little bit mechanical, and it is because that the bigger that the deal is, then you need more advisers, you need more financing counterparties, you need more regulatory findings, you've got more jurisdictions. So, it it makes sense that that would be associated with higher leak rate.

The next effect is related to crossing regions. So, cross regional deals leak at 9.

7% against an 8% leak rate, for inside the regions. And we we we also look at the the different pairs of regions that you can have based on transactions.

And so what our report shows is that, the specific combination can make a big difference. So if you have an Asia Pacific acquirer buying an EMEA target, the associated leak risk is 11%.

EMEA, or Asia Pacific acquirers buying in Americas, that's 10. 6%.

Whereas if you have a purely domestic Americas transactions, that's 68%. And here, potentially, part of the explanation is elapsed time because crossing a region means more regulatory regimes.

It means, working with more local advisers. You need more sets of approvals and so on and so forth.

I think another interesting effect here is crossing industries. So what we find is that the leak rate is 8.

8 when the buyer is moving into a sector it doesn't already operate in against 7. 4 leak rate when the acquirer stays in its own sector.

And this result, I think, is, very interesting because the cross industry deals in our sample are actually smaller, in terms of the transaction size, compared to the same sector transactions. So that is a strong strong result.

And, potentially, a possible explanation here is to do with the commercial due diligence. So if you've got a buyer moving into a new sector, they therefore have to learn, from the outside about the new sectors.

So that means talking to customers, suppliers, and people who worked in the industry. And those are exactly the type of conversations that you cannot conduct inside a data room.

So, typically, you probably won't sign a confidentiality agreement here. On the other hand, if it's a buyer just consolidating its, inside its own sector, then they have the necessary knowledge.

So there's no need to engage in these types of conversations. And then the next one I'd like to mention is about, financial sponsors.

So what we see is that 8. 8% of transactions where financial sponsor is involved, there is a leak compared to 8% of leaks for transactions where there's no financial sponsor involved.

And this is a relatively small gap here, and I think the plausible explanation here is, similar to, what we talked about when we talk about the method of payment. So you've got the financing syndicate again and the type of conversations that need to take place, there.

I think one more interesting aspect on this particular, slide that we're sharing here is when we look at the target companies' characteristics. So almost every measure of the target company doesn't appear to produce a difference in terms of the leak rate, in terms of the leak risk.

So we look at leverage. We look at valuation multiples, return on equity, cash on balance sheet, and there doesn't seem to be a significant difference.

The one exception is the EBIT margin, which is a measure of the profitability, where we see that the most profitable targets actually tend to leak the least. And, interestingly, the peak is not at the bottom where you might expect it to be, but it's the second, quarter, which is 9.

1%. So it's kind of a shape of an arch rather than a slope.

So this could be about something telling us about the sales process. So a genuinely good asset doesn't have to go looking for a buyer.

The seller can run a tight process, show it to a handful of people, and control who has access to information. Whereas if you have a weaker asset, it is much harder to sell.

And so you've gotta.

Russell Enright

37:22 - 37:22

Yeah.

Valeriya Vitkova

37:22 - 37:46

approach a higher number of buyers, and then the circle of people who have access to confidential information, expands. So I think this is this is pretty much everything that, I wanted to highlight here in terms of the features or factors that contribute to leak risk.

Russell Enright

37:46 - 37:56

Thank you, Val. Is the common thread here simply if there's more people in the room, there's more leak risk, or is there something else going on?

Valeriya Vitkova

37:56 - 39:36

Yeah. So I I think this is part of the answer.

So the intuition is right, but it's not the whole story. So there I think there is a couple of things that could be driving this result.

So one of them is as you mentioned the number of people. More people simply knew, but there is also the incentive to leak, and I think we shouldn't forget about that.

So in many cases, someone has a reason to talk. And if we look at the type of transactions where the leak risk or the percentage of leak rates clusters in our data, we see that this is the largest deals, the deals with the most banks on the buy side, and the deals where you're paying cash.

So we can say that, potentially, this is not a random selection of transactions. They are precisely the deals where being in the market changes the outcome.

There are cases where a leak can help, for example, confirm the financing, or maybe it can help you to put pressure on the board and so on. So at least some of this may be purposeful rather than accidental.

And I think, because the type of transactions have the same characteristics, it's easy to conclude, on the surface of it that it's due to the headcount. But, actually, if we think about it, it could also be because that's the incentive to leak, and that's very, very strong for these specific types of transactions.

Russell Enright

39:36 - 39:46

Does that mean that the biggest, most com complex deals are effectively undefendable from a confidentiality standpoint?

Valeriya Vitkova

39:46 - 41:31

So I would say no. Although I understand why people may ask this question because the numbers do look a little bit daunting until you actually look at them properly.

So if we look at the actual size of the effect, what we see is that the largest quartile of deals leaks at 9. 8%, whereas the smallest, deals leak at 7.

4%. And I think this is this is a very kind of significant difference.

It also means that more than 90% of large deals don't leak. 9.

8% are associated with leaks, but the rest are not. So what I see, there's a situation where complexity makes it harder, and therefore, we need to have more focused, more deliberate attention rather than less.

So what our analysis suggest is that it's more about how you structure the transaction. So it's a design variable.

It's not a fixed property of the transaction itself. So in a way, we can think of leak risk as an accumulated result of the decisions.

The decision about how many advisers you mandate, the decision about how you structure the financing, the decision about how many parties you bring in the process. So I think this is, like, a really, important factor that we need to consider.

Russell Enright

41:31 - 41:42

And how about technology and digital communication? Have they changed the nature of confidentiality since this research began all those years ago?

Valeriya Vitkova

41:42 - 43:55

So we started the, league study many, many years ago. And I think since then, the acquisition process has changed significantly, particularly in terms of improvements in controls of confidentiality.

So what we have now is significantly better in principle. And I think, as people who work in VDR, Interlinks knows this, best.

So you got granular permissions about who can have access. You got audit trails.

You can manage who has access to the data. But I think, what we should also acknowledge is that, the leak rate during the same period has drifted upward rather than downward.

So here it seems that the controls have got better, but, also, the job has become harder in a faster, way. So the circle of people who have to be, told has widened more quickly.

And so, in a way, I think digitalization and artificial intelligence has has changed the shape of the problem again. So, for example, when you use AI tools, there's always another place that sensitive information can sit.

It could be a meeting transcript. It could be a summary of a document.

It could be an index of the data room. And none of those sign a confidentiality agreement.

And so I think that that poses a challenge. However, I think it also poses an opportunity if we act fast enough, so that we can control the process better.

Professor Scott Moeller

43:55 - 44:01

And if I can just add, if I could just add, Russell, when we first started this study,.

Russell Enright

44:01 - 44:02

good.

Professor Scott Moeller

44:02 - 45:11

VDRs were still relatively new. I think, you know, you were there back then.

I was as well. And I would probably even say when we started this study, maybe half of deals were done using BDRs.

Many people listening to this may not believe that, but, that it was probably around that number. And now it's virtually a 100%.

But then the, the tools that someone can use to leak have increased massively as well. We didn't have Reddit back when we first started doing this study.

You know, there weren't all of the other, means of communication, even, you know, the WhatsApp and other, similar ways of being able to communicate, Telegram and whatever. So, you know, it is remarkable, I think, that despite what's happening in technology, both in the ability to be able to leak, but also to be able to protect data, the figure is stayed relatively steady despite the fact that Val has mentioned and properly so that there is, you know, a slight uptick in leakage.

But, you know, but it's not massive.

Russell Enright

45:11 - 45:25

Well, let's stay on that theme, Scott, of of managing risk. So what best practices would you say deal teams can put in place to stop leaks happening? But if they do happen, how should they have a containment plan ready?

Professor Scott Moeller

45:25 - 47:02

Well, first off, every deal team should have a containment report. And given that we have the data to show that one in, every 10 or 12 deals leak, if you look at the last couple years, and then over time, you should be planning for that possibility, if not even that eventuality.

As Val points out, that still means that over 90% don't leak, but I think that the figure of one in every, 10 or 11 deals leaking is pretty significant. So have a containment plan, in in place on that.

How do you prevent having to use that containment plan? I think a lot of what Val said, one could just take to heart. Probably the most significant, piece of advice would be to do a deal with a private company, just because, that does make it simpler.

But, otherwise, I think it's keeping the deal team small and the deal itself less complex. You know, as you increase complexity, Val mentioned it, you know, as you begin to look at cross region, cross border, you know, larger, you know, you you see a higher deal leak rate.

And then also in terms of how you structure your deal team, whether you have a lot of advisers or not, whether you need to have, additional financial advisers. You know, those are things that would, would tend to increase, albeit it's not as if they change it by orders of magnitude.

Russell Enright

47:02 - 47:18

Excellent. Okay.

Thank you, Scott. So that's best practices.

Val, similar thing. But based on the completion and timeline data that you're talking about, what differentiates firms that manage leaks well?

Valeriya Vitkova

47:18 - 49:15

Yep. So I think that the completion and timing evidence says that, a leak does not on average derail a transaction.

So does it not it it doesn't completely kill it. Over the full fifty, seventeen years of our data, leaked and known leaked deals, completed the sec essentially the same rates, and the time to completion is the same.

So what we can say is that we can survive a leak. Where the damage really shows up is in the price, and that amounts to 20 percentage points of premier premium, paid by the buyer.

So in my view, the meaningful distinction is not between firms that recover from leaks and firms that do not. It's between firms that prevent leaks and firms that pay for them, which means that the effort should really be placed primarily primarily at the front end of the deal process.

So once a deal has leaked, you are managing a price problem that has already materialized. Whereas before the deal leaks, you have a great deal of control over, how you manage the the diligence process effectively, how wide the circle of people, is, and so on.

So if I had to characterize the firms that get this right from what our data implies, I think the firms that manage leaks well are more likely to make decisions about who is involved in the preannouncement process, consciously and early on rather than just letting the circle of people involved grow.

Russell Enright

49:15 - 49:42

Very good. Thank you, Val.

I've got an eye on the clock. So, and I I wanna make sure that we keep a little time back for questions if we have any.

Before I do that, though, final question to each of you. If you could give dealmakers one piece of advice for protecting confidentiality in 2026, what would it be? Val, perhaps I could go to you first.

Valeriya Vitkova

49:42 - 51:08

Yeah. So I would say that, treat the leak risk as a design variable, which means how you structure the deal.

It's not, an accident necessarily waiting to happen. And why I say that is because the single clearest finding in our report is that what can predict the leak is how the transaction is built or how it's structured.

It's, the financing of the deal. It's how many institutions you bring inside the wall.

It's how many borders, and industries you cross. And every one of these decisions, is, typically, you make these early on in the m and a process.

And, typically, it's not, a reason that's related to current confidentiality that, motivates these decisions. So my advice would be to ask the question at that point.

When the decisions are still open rather than at a point when you've already, enlarged the circle of people who know about the transaction. So make sure that you can see the confidentiality very early on in the process knowing that it's a design variable.

Russell Enright

51:08 - 51:13

Great. Thank you, Val.

And, Scott, for for you?

Professor Scott Moeller

51:13 - 52:33

Yeah. One piece of advice in 2026 and, emphasizing 2026, because I think in the next year or two, it may not be the advice that we need on, need, is to be very, very careful about how people on the deal team are using AI.

What do I mean by that, Russell? I think if you look at the big advisers, if you look at the law firms, the investment banks, and, of course, many, many, many large corporates, they have a ring fenced AI. They might have their own LLM to use.

They may prohibit the use of of, public AI, but that doesn't necessarily mean that a small company you are acquiring is acting in the same way. In fact, it's unlikely they're gonna have a bespoke, robust LLM and they will be using Gemini or Claude or Chatchi PT or any of the other products that may still be coming down the line.

And, that's where leaks could take place. I think that will be different two or three years from now, although perhaps it could even be worse.

But make sure that the entirety of the group of people who are using, who are who have access to data, are not using those public AI networks.

Russell Enright

52:33 - 53:26

Thank you, Scott. That that reminds me actually to tell everyone here that at Intralinks, we're seeing firms integrate smarter controls into the deal process.

Our deal center AI platform helps deal teams monitor activity in real time, automate due diligence, and maintain a clear audit trail. Then that ensures right people see the right information at the right time.

So you can combine discipline with intelligence to reduce information risk and move faster with confidence, especially on the complex adviser heavy deals that this year's data shows are most exposed. So great.

Let's, we've only got a couple of minutes left. So let's go and see what questions we've had from, those in the audience.

And I can see while you were talking on the topic of containment reports, Jason Moore has asked, what specifically is con covered in a containment report? I think that was for you, Scott.

Professor Scott Moeller

53:26 - 54:51

Yes. Perhaps containment report, if you said a risk limitation report or a recovery report, that might be an even better way to be able to say it.

What you would typically have in that is you'd probably be working with your PR advisors or just with whoever it does internally, whoever you use, in order to be able to know what to do, who to contact, and when, and how, when in fact the deal leak comes so that you're not suddenly throwing up your hands, calling an advisor, who themselves will then have to put something together, on that. You also need to make sure that you have the financing in place, or you have the ability to be able to be more flexible than you would be otherwise, because note one of the most important things that we've said today is a deal leaks.

It has approximately double the premium of a deal that doesn't leak. Now that leak may have been intentional on the side of the target in order to be able to get that additional 50% premium, doubling of the premium.

But the, you know, but it may not be. So, you know, be prepared.

But I think the whole PR and notification side is probably the most important are are the most important factors in that, in in that planning for the possibility of a leak.

Russell Enright

54:51 - 55:06

Thank you for the question, Jason. I think we have time for one more question.

We've got a question for Scott. Scott, what do you think the increasing use of AI will have on deal leak rates?

Professor Scott Moeller

55:06 - 55:59

Interesting. On that, I do not see how it lowers the, the level of deal leak rates.

So by implication, it's either not going to have any effect because of what I said earlier where I think you will have offsetting, trends, you know, those things that are making it, easier to be able to reduce the number of of of, carbon based people, you know, who are dealing with it as opposed to silicon based, AI agents. So, to the degree that it's people who leak, then, you'll have, fewer people.

But I do believe that the waves of being able to leak will only increase. It may increase exponentially.

So those will be two offsetting factors. I'm not sure exactly where it's going to go.

Russell Enright

55:59 - 56:26

Okay. Very good.

Thank you very much, Scott. And I think we're pretty much at time.

So thank you everyone, for joining today, and thank you again to our speakers, Scott and Val. If you've enjoyed the analysis, you can download the full report on the Intralinks website.

Click through on the ticker banner on your screen now or look out for it in our follow-up email. Thank you for joining, and we'll see you next time.

Valeriya Vitkova

56:26 - 56:26

Thank you.