Anthony Hilton: How leaks turn up takeover pressure

One of the things that sets financial journalism apart from other branches of the trade is that in times of high market activity, the press can become a player.

Instead of merely reporting on an outcome, it can determine what that outcome is. This sets it quite apart from, say, sports journalism, where no amount of gilded prose  will score a goal or take a wicket.
It used to be the case that the financial press was only courted during the latter stages of  takeover bids. This was because when the weight of the press comes down for or against a bid,  it influences the way investing institutions vote – if only because going with the herd makes it easier for investors to explain their decision to clients.

Nowadays though, it is all much more tactical.  Surely one reason for Aviva last week deciding not to continue its takeover bid for Prudential was that it had not got the press on side – news of the proposed deal had leaked prematurely, catching Aviva off guard.

That meant initial press reaction was lukewarm – so many other insurance deals have been a disappointment, and this message was played back to the Aviva management when it went to make its case to investors.

None of that is particularly out of the ordinary, however, at least when set against the latest use of the press (allegedly so, at any rate). It is the contention of ITV that the private equity consortium –  consisting mainly of Apax and Goldman Sachs – seeking to bid for the broadcaster deliberately 'leaked' to The Daily Telegraph. It did this because the ITV board had rebuffed its initial approach.

By putting the story into the public domain, the  potential bidder turns up the heat on the reluctant board because the latter is bound to have shareholders who think it should at least talk to the bidder – especially if shares have been flat.

For the record, the consortium after ITV has denied leaking its bid, so the owner of the loose tongue must remain a mystery. It has not denied that the leak has helped its cause though, because exactly as could have been predicted, the pressure is now on the ITV board to explain what is so wrong about the offer. If the bidders really did not leak the story, next time they surely will.

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