M&A Trial Balloons Move to the Web

Paul Murphy had a kindasorta

scoop today:

Mobile phone group Vodafone has been considering a $160bn takeover bid for

its American peer and partner, Verizon Communications — a deal that,

if consummated, would rival AOL’s takeover of Time Warner and Vodafone’s

earlier acquisition of Germany’s Mannesmann as one of the largest M&A

transactions on record, FT Alphaville has learned.

That’s a huge scoop, no? So why am I downplaying it? Because it’s nowhere near

the front page of the FT, where one might expect to normally find such things.

In fact, it’s not in the print version of the FT at all. It’s on the website,

and on the website only.

In fact, this story is proof positive that the FT will publish market-moving

stories on the web that it won’t print in its paper. It’s an interesting double

standard, and even a justifiable one. But it also plays right into the hands

of investment bankers. Says the Epicurean

Dealmaker:

Given what I know of such deals—and past experience—this story

itself is part of a carefully orchestrated plan by Vodafone’s bankers to test

equity and credit markets for their receptivity to such a deal.

Interestingly, Vodafone denied

the story as soon as it appeared (but after Verizon shares had risen by

$1.10 apiece), prompting a follow-up

posting at Alphaville which eventually gets around to saying that "we

now know that the whole takeover plan was subsequently dropped."

Why would bankers would leak the story to the FT if they knew that the plan

had already been dropped? A couple of possibilities spring to mind: maybe they

were annoyed that Vodafone had dropped the plan, and were trying to inject some

semblance of life back into it by making it public. Or maybe they didn’t

know that Vodafone had dropped the plan, and were actually not nearly as close

to the company’s decision-making nexus as they thought they were.

In any event, the editors of the print edition of the FT are looking reasonably

smart this morning for not touching this story. And Paul Murphy isn’t looking

too shabby either: he’s clearly a well-connected journalist who is good at passing

on what he learns, which is his job. It seems that the web really does have

a role to play in these kind of situations. Which will be good for volatility,

at least, going forwards.