Firms intensifying efforts to stop disclosures from investment banking sectors
The UK Takeover Panel is ramping up its efforts to clamp down on leakage in takeover deals, according to recent reports. Regulators have long been pressing banks to reduce the number of people with continuous access to non-public inside information of transactions.
Investment banks are being urged to reduce the number of advisers working on UK takeover deals due to growing concerns about leaks. A senior investment banker suggested that foreign bidders not accustomed to UK rules are most likely to leak.
The Financial Conduct Authority (FCA) has warned that it can impose unlimited fines, order injunctions, or prohibit regulated firms or approved persons for breaches of market abuse regulations. This underscores the regulatory seriousness attached to preventing leaks.
Regulations and industry practices in the UK focus heavily on reducing the number of insiders with access to non-public information to prevent leaks and insider trading. The Takeover Code imposes tight restrictions on who a bidder can speak to before an offer announcement to avoid leaks. It also mandates disclosure and potential announcement if rumors or leaks affect share prices, triggering automatic time limits such as a “put up or shut up” deadline of 28 days for formal offers after a leak.
The main sources of leaks tend to be the multiple advisers and employees historically involved in takeover deals. Companies and regulators now seek to drastically reduce this number. The FCA found that almost 40% of takeovers of UK listed companies were reported in the media before their announcement, based on data spanning April 2024 to May 2025. This highlights the need for stricter measures to maintain secrecy.
In 2019, an FCA study found that one firm had more than 600 employees with full access to information about a deal, despite only a dozen team members actively working on it. More recent reviews in 2022 show reductions to between 250-450 insiders, which is still considered high and under scrutiny.
Clients oppose the idea of hundreds of employees having access to confidential information about their transactions, as it can be difficult to pin down a leaker's identity. Many believe leaks come from companies trying to spark bidder interest.
Several clients have recently asked banks to review the number of employees with access to live transaction information. Advisers with access to non-public information are expected to maintain total secrecy before announcements to prevent insider trading and ensure fair treatment of all shareholders.
In conclusion, current UK regulations and industry practices emphasize minimizing the number of insiders with access to inside information during takeover deals, imposing strict secrecy rules, and enforcing tough penalties for leaks. The main sources of leaks tend to be the multiple advisers and employees historically involved, which companies and regulators now seek to drastically reduce.
Investing in the UK might require adherence to stricter confidentiality measures due to the ongoing efforts to reduce leaks in takeover deals within the banking and finance sector. Businesses involved in such deals should be aware that the number of employees with access to non-public information is under scrutiny, and drastic reductions are sought to maintain fairness in the economy and prevent insider trading.
