The Funny Game Of Fake M&A
Fake M&A – it takes so many forms!
The Chinese forex regulator is cracking down on one type – the pretend overseas M&A deals invented to move assets and capital out of China.
“In the past year we found some Chinese firms and individuals moving assets overseas via outbound investment, this is certainly a key area of concern for us,” Guo said, without disclosing details.
The authorities will “definitely put high pressure” on tackling fake overseas mergers and acquisitions, he said.
China will crack down on illegal activities to keep its foreign exchange markets stable, SAFE official Xu Weigang told the same conference… China to crack down on fake overseas M&A deals to curb money flight
And there’s a lot of capital flowing out of China. ChinaDaily quotes a PwC report that outbound M&A reached 493 deals worth $134.3 billion in H1, 2016, a new record.
But fake comes in different colours.
Fake news about acquisitions is increasing being used by fraudsters to manipulate share prices or take advantage of market panic. Forbes provides an example of a hoax posted on a Bloomsbery lookalike site of a Twitter takeover.
…there are ways to spot fake M&A bids, LBOs, and the like.
In the case of the Twitter hoax, a close reading of the article would have cast serious doubt on its credibility. The report spelled ex-CEO Dick Costolo’s name wrong, and much of it either made no sense, or was grammatically incorrect.
“While a deal is expected to to be reached, bankers may rebuff any suitor or work out an eventual sale, the people said asking not to be named as the information is private,” the report stated.
That’s incomprehensible. The report is also littered with errors. … More here
And, of course, vendors notice no shortage of fake buyers – “investors” claiming to have interest in acquiring a business but who have no intention of following through.