The next wave of deal bust ups?

Jim Kim — Fri, 07 Nov 2008 13:09:23 -0500

We noted recently that the top ten biggest private equity deals, in most cases, are weathering the storm. But that doesn't mean we won't see another wave of deal bust ups. The New York Times says, "This next wave of failures comprises the deals negotiated after that time, deals largely struck in the spring and summer of 2008. This second wave of deals was negotiated with relatively full knowledge of the difficulties in the market and the problems with the pre-August 2007 private equity deal structure." Article

Media leaks negatively affect potential deals

Jim Kim — Wed, 11 Jun 2008 21:37:47 -0400

Leaking to the media, especially the Wall Street Journal, about possible deals is a grand tradition on Wall Street. Many a reporter has made a reputation via deal talk. For bankers, the goal is to control the story spin, which makes sense in sensitive situations. Some may want to prod another bidder. At times, a leak can be a problem, especially if the stocks go haywire. The most recent twist on this comes from research conducted by London's Cass Business School and reported by IDD. It found that just under 50 percent of leaked deals actually close, compared with 72 percent of non-leaked deals. Also, the premium paid by the winner in a leaked deal is 14 percent lower than in non-leaked deals. To leak, or not to leak boils down to specific situations, it seems. On balance, staying mum may be a better bet.

For more:
- here's the IDD article (For FierceFinance readers)