The Colab Brief - 107: The DL on PR for M&A

Welcome to The Colab Brief

Author

Ash + Lizzy
February 24, 2024

This week, we’re joined by Anthony (Ant) Steel. 

Ant Steel is the founder of Steel Communications, a strategic consultancy that helps Founders & CEOs tell their stories to the stakeholders that matter. Prior to launching Steel Comms, he spent over a decade at business advisory firms, including Brunswick Group, Joele Frank and Weber Shandwick. In his career to date, Ant has advised on +$150B of M&A, IPOs and fundraises. He is also a VC scout and a repeat guest lecturer at Syracuse University's Newhouse School of Public Communications.

Read time: 7 minutes 

Context

This week, Bloomberg reported that $425B of deals have been announced globally so far this year, up 55% on the same period in 2023. 🤑 With a palpable sense of renewal in the M&A world, let’s dive into the vital role Comms plays in this lucrative, pressurized, and complex world.

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What is M&A? 🧐

M&A stands for mergers & acquisitions, i.e. companies buying, selling, and/or merging with each other. 🤝

Why does it matter? 🤷

These corporate deals often involve billions of dollars and hundreds (if not thousands) of employees. They are highly pressurized environments with legal, regulatory, financial, and reputational hurdles to navigate. As such, the role advisors play in guiding the companies through the process is essential - typically, bankers, lawyers, and communications experts combine to form the core advisory group. 

Sounds finance-y. I work in Comms / PR - why should I care? 

The role financial comms plays in the M&A process cannot be overstated. As communicators, we map out the strategy, timeline, and tactics, as well as hold the pen on the creation of deal materials including: ✒️

  • The announcement itself (press release)

  • Q&As for multiple stakeholders (employees, customers, suppliers, investors, media, etc.)

  • Media strategy & tactics, including prepping the executive teams ahead of planned media interviews. 

  • Prepping for - and potentially responding to - any leaks. A leak means that someone - usually a deal reporter - has sniffed out enough details to publicize meaningful information about the deal, potentially jeopardizing the whole process. More on this shortly…

Confidentiality

You’re working with some of the biggest companies in the world. You’re handling sensitive material. Material that could move markets. Material that could make or break the deal. Material that will impact careers & livelihoods. It’s fair to say the stakes are high. So the last thing most stakeholders want is a leak…🤐

  • Why do leaks happen? As mentioned, often the source of a leak is an M&A reporter poking around for information because they’ve “heard something’s going on”. 🤔

    • These reporters - particularly those at leading business & financial platforms like WSJ, Bloomberg, CNBC, Financial Times, NYT, etc. - are well-trained in the art of sniffing out a deal. They have spent years building their list of sources, often from M&A bankers/lawyers/investors who work on these deals daily. They are experts at tracking down enough information to potentially publish an exclusive story. 📖

    • Exclusivity matters to them because being “first” on juicy deals is what their editors want. Why? It positions them in front of their peers, leading to increased readership or viewing figures. Reputationally, the value of breaking the news first is massively important to these reporters. 🥇

  • But reporters are not the only ones who stand to benefit from a well-placed leak:

    • Shareholders and investors in the target or acquiring companies may also benefit if it leads to an increase in the stock price/valuation of either company. This is most likely if the leak were to generate speculation about favorable deal terms for either company, potential synergies, etc. 📈

    • Similarly, some financial advisors and consultants may stand to profit from initiating leaks due to inflated success fees, securing new business opportunities off the back of the deal, etc. But it’s important to note that initiating leaks during an M&A process can have serious legal & ethical implications due to insider trading rules. 😵‍💫

  • What to do when a media leak occurs

    • Assess if the reporter actually has a story or whether they are fishing. 🎣

    • Then, decide whether to:

      • A) Not comment - the plan if you think the reporter is fishing (Example statement: “As a matter of company policy, we do not comment on rumors or speculation”).

      • B) Use one of your pre-prepared holding statements - the plan if you think the reporter may have credible information / internal documents or can demonstrate that they have seen them (Example statement: “As a general rule, our company does not comment on rumors or speculation. However, while we can say that we have been in preliminary talks with [other company], there is no guarantee that an agreement will be reached. We have no additional information to share at this time.”)

      • C) Attempt to work with the reporter but only in the event it’s a more substantive leak and you’re convinced the reporter is going to publish:

        • Here, you would buy some time by incentivizing the inquiring reporter to hold their story by providing them with access to management. This could include on-the-record quotes and other insights into the transaction for a story they could publish in conjunction with the distribution of the press release. This would afford a meaningful opportunity to better shape the story, with a higher chance of controlling the narrative than a non-engagement scenario.

Emotional toll 

For the executives of the companies involved, the M&A process can be emotionally draining. They are in charge of steering the ship from inception to execution to completion. As well as managing their workforce's expectations, they often stand to make potentially life-altering sums of money from these scenarios. Sizeable deals can take months, if not years to complete. During this time, your role as a comms advisor often blurs into providing the requisite personal support to stressed-out execs. I can recall on more than one occasion sipping a late-night beverage and talking sports with execs inside the “War Room” (board room) during a protracted takeover they were attempting, enabling them to forget the rigors of the process, if only fleetingly. 🍻

Conclusion

The success of M&A ultimately extends beyond financial considerations. Shaping public perception by effectively communicating the rationale is essential. This is where comms pros emerge as linchpins in the process, leveraging their expertise to build transparency, manage stakeholder expectations, preserve brand equity, navigate crises, and secure the desired results. 🎉

As the M&A landscape continues to evolve into the spring of 2024, the critical role of Comms will become increasingly imperative. 🔑

Until next week,

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