The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune

Alexander Wagner and Filipović, Zoran

No 13560, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Mergers and acquisitions are often motivated by the intention of creating value from intangible assets. We develop a novel word list of intangibles and apply it to takeover announcements. The value of these deals to the acquirer, as shown by abnormal announcement returns, is questionable: One standard deviation more in intangibles talk lowers returns by 0.50 percentage points. Agency problems explain little of these results. Rather, the cross-section of announcement returns, payment mode choices, and insider trades suggest that intangibles talk reflects managerial overoptimism. In sum, takeover announcements reveal important information regarding the quality of deals.

Keywords: Corporate announcements; Intangible assets; Intangibles talk; Mergers and acquisitions; Takeovers; Textual analysis (search for similar items in EconPapers)
JEL-codes: G14 G34 (search for similar items in EconPapers)
Date: 2019-03
New Economics Papers: this item is included in nep-acc and nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The intangibles song in takeover announcements: Good tempo, hollow tune (2023)
Working Paper: The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune (2023)
Working Paper: The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune (2022)
Working Paper: The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune (2022)
Working Paper: The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune (2021)
Working Paper: The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune (2021)
Working Paper: The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune (2019)
Working Paper: The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune (2019)
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