Return to M&A offers Wall Street chance to improve reputation

During the past two years, financial communication was a roller coaster, with all the late nights and crisis communication plans turning into one long nightmare.

During the past two years, financial communication was a roller coaster, with all the late nights and crisis communication plans turning into one long nightmare. This year, however, it feels like things are finally starting to get back to normal, and many communications executives are breathing a sigh of relief. But as the Grateful Dead said, “when life looks like easy street, there is danger at your door." That danger comes in the form of the increased M&A activity certain to take place this year.

Most market participants believe 2010 will be a watershed year for M&A. I expect financial service institutions and their vendors will be no exception. Consolidation in asset management already started in earnest with BlackRock's purchase of BGI, and the financial technology sector is starting to make headlines as traditional tech players gobble up FinTech companies. As we face a year full of deal announcements that may have a dramatic effect on headcounts, will this activity become another toxic event for Wall Street? Or can we use this opportunity to win back our reputation? I'd argue it's an opportunity we cannot afford to pass up.

We have all seen how bad communications can affect the market. By ignoring or patronizing its audience, a company invites a negative perception that looms over every other move it makes. Wall Street firms need to step up and engage the press, tell their story, and work on repairing broken relationships. Here are a few reasons why:

1)  Transactions are highly sensitive to timing issues like leaks, and the press generally assumes the worst about layoffs.

2) Transactions are prone to misinterpretation about company motives and the real synergies for the products and people involved.

3) Transactions will be lightning rods this year. A company that generally falls below the radar could find itself the subject of blog commentary for a deal that would have received little attention last year. 

If your firm plans to complete a transaction in 2010, it is imperative to get it right. You should get out a good story to mitigate any risk that could spring up after the announcement. My advice is to retell the company story today. The chess board is significantly reshuffled on the media side, with many journalists switching beats or popping up at new outlets, and it's important to start rebuilding now by getting your executives out to meet the press.

Deborah Eisenberg is a VP and head of the San Francisco office at Cognito, a PR and marketing agency specializing in finance and technology.

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