Corporate media connections and merger outcomes

Md Miran Hossain and David Javakhadze

Journal of Corporate Finance, 2020, vol. 65, issue C

Abstract: We examine the relation between acquirer social ties with the media and merger outcomes. We find that, consistent with the media management hypothesis, media connectedness is associated with the higher bid announcement return, lower takeover premium, poorer post-merger operating performance, greater likelihood of deal closure, and greater acquisitiveness. The association between media connections and merger announcement returns is more pronounced for stock deals. Examining the underlying channel, we show that the media networks are positively related to acquirers' media coverage and sentiment of the news articles during the pre-bid announcement period. Our findings are robust to alternative variable measurement as well as tests for endogeneity.

Keywords: Mergers and acquisitions; Media connections; Media coverage and sentiment (search for similar items in EconPapers)
JEL-codes: G30 G34 L82 Z13 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:65:y:2020:i:c:s0929119920301802

DOI: 10.1016/j.jcorpfin.2020.101736

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