How M&A stories can impact M&A negotiations

Stories about merger and acquisition negotiations broken by the business media can kill the deal, according to a senior partner at Brunswick Group, which is hired by companies involved in deals to handle its PR.

“When I think of leaks I think of stories that break on Bloomberg or one of your competitors,” said Steve Lipin, who is also a former M&A reporter for The Wall Street Journal. “It absolutely changes the dynamic. If the terms haven’t been set yet, it creates real issues.

Lipin, who heads the M&A practice at Brunswick Group, spoke with Bloomberg’s “Deal of the Week” host Alex Sherman and Bloomberg managing editor Jeff McCracken about what happens when M&A stories leak, how he handles anxious clients and how he helps companies explain to investors and reporters why they’re buying and selling businesses

Lipin explained that his job is to help reporters understand why deals are being done, but that stories written about mergers and acquisitions never fully portray the full story.

“The thing about working as a reporter is that you never have complete information,” said Lipin. “It doesn’t mean that the information is wrong. You just write what you know.”

Lipin added that a “preponderance” of why a deal is done is usually reported. He works with a company to decide what it believes are the most important and salient facts to tell reporters and investors once a deal is completed.

Communications firms such as Brunswick Group, Abernathy MacGregor and Joele Frank are hired by companies involved in mergers and acquisitions to handle questions from the media. Lipin noted that these firms are hired after accountants, lawyers and bankers are hired and when there is a likelihood of a deal being agreed upon.

“Leaks are part of the rhythm of the business,” said Lipin, noting that when a leak occurs in Great Britain, the companies are required to issue a statement. “You do everything you can to avoid the leaks. It creates a dynamic where you don’t know where it’s going to lead. It’s less about the finger pointing, and more about how much is this going to impact getting to the finish line.”

Lipin left the Journal in 2001 after being its M&A reporter from 1995 to 2000.

“I had too many kids and I lived on the Upper West Side,” said Lipin in the podcast. “I was fascinated and am still fascinated by the deal business. I loved every day of my journalism career and my Wall Street Journal career. But was curious about the other side, helping companies craft their stories.”

Listen to the podcast here.