It doesn’t matter whether it was started by the rumor mill, an investor recommendation, or a public announcement, the M&A process is rife for speculation. M&A inquiries require a heightened set of skills when dealing with questions. Communications involving potential targets or deals need to strike the delicate balance of staying true to your company’s reputation while not jeopardizing its financial future.
The recent takeover attempt of Shire by AbbVie Inc. generated immense Wall Street chatter. While both companies were careful in their communications, the private negotiations, which ultimately fell through, fueled constant media speculation. Blackberry has been the subject of countless acquisition rumors and news reports, and its stock price ebbs and flows, highlighting the true financial impact of the grapevine.
It’s crucial for a company spokesperson to know how to properly handle speculative questions. One wrong statement or remark could have material impact on stock pricing. What do you do when media and investors ask incessantly about a potential target?
Here are a several CommCore tips to use when managing public-facing financial Q&A’s.
- Remember that any conversation, in or out of the office, can be taken at face value. Once your company is in play, even a casual mention at a cocktail party can turn into tomorrow’s NY Times headline or a Twitter trending topic – media and investors always have their ears open.
- There is no such thing as “off the record.”
- Become a broken record with a simple phrase: “We don’t comment on rumors and speculation.”
- Brush up on bridging techniques that help you redirect your audience to your main message.
- Stick with to messages approved by IR and legal counsel; don’t make hints or mention other companies by name.
- Speak in terms of your company’s value to the industry not its monetary value.
- Never flatly answer a question with “no comment” or “I can’t talk about that.” These phrases make you seem arrogant and untrustworthy.
- There is an art to being as vague as possible about potential takeovers or acquisitions without seeming evasive.
- Be mindful of social media: In what was intended as a Direct Message, Twitter’s own CFO accidentally tweeted about an potential acquisition. Even though the tweet was quickly deleted, analysts and financial reporters had already jumped all over the news.
In the high stakes of M&A and other types of financial transactions, a simple or careless mistake can be considered material and have market-shaking consequences.