Sources for mergers and acquisition stories talk to reporters because of vanity, an interest in sharing information, revenge and wanting the reporter to get the story correct, according to three Bloomberg News M&A reporters.
“Sources run a full spectrum from those who don’t talk to M&A reporters because they know better to people who are purely transactional and want to share information,” said Matt Monks, who covers M&A deals in financial services, industrial and utilities for Bloomberg.
Bloomberg’s three U.S. M&A reporters — Ed Hammond, Monks and Alex Sherman — talked about how they do their job in a podcast called Deal of the Week.
Most M&A stories are broken and not strategically leaked, the three contended. And an M&A reporter’s job is to uncover information that is not yet public and make it public. “Our most impactful stories will move markets,” said Sherman.
All three agreed that business news media organizations breaking M&A stories are able to do so because of the relationships their reporters have developed with investment bankers, lawyers and public relations counsels. They said that their main competition for M&A news is The Wall Street Journal, the New York Times, the Financial Times, Reuters and CNBC.
“Sometimes it is clearly that we have a better relationship with that person,” said Hammond, who covers health care, consumer and real estate deals. “I think the other side of it, and we see it fairly often, [other media] will be the conduit of choice to get information into the market. That will reflect the audience they have.”
For example, if the two companies involved in a deal want traders to know about the transaction, they’re more likely to talk to Bloomberg.
Monks said that he works hard to let his sources know how much knowledge he has about the companies, the industries and the potential deals, telling them, “I know this stuff better than anybody.”
“I think people respond to that,” said Monks. “Relationships take many forms. Maybe you have a good chemistry with them.”
Monks estimated that about 10 percent of all M&A stories are leaked to a specific media organization without a reporter finding out about it first. These can be a small deal, or a deal that is unusually complicated where they want to control the narrative.
Or deals can be leaked “for reasons I really don’t want to know,” said Monks, such as someone involved in the process being left out of the final negotiations, bad feelings or putting pressure on the other side.
“The vast majority of the time, that is not what is happening,” added Sherman. “The three of us are making phone calls and meeting people and picking up information. With company reporters, we are able to corroborate information.”
Sherman noted that he is bothered when readers and investors think that M&A stories are a way for companies to use reporters to spin information.
“What we do is pester people and get them to tell us things they’re not supposed to,” added Monks. “We are way at the bottom of that food chain, but we are part of that process.”
When asked by Sherman why he liked being an M&A reporter, Monks had a simple response.
“If you want to survive in this business, in journalism, you have to prove that you can add value,” said Monks. “What’s one thing that can’t be replaced? Scoops. It’s fun, it’s interesting, and if you can do it, you can add value.”
To listen to their conversation about M&A reporting, go here.
