 The information value of M&A press releasesYang Cao, Florian Kiesel and Henry Leung Journal of Corporate Finance, 2023, vol. 82, issue C Abstract: How do managers comment on merger transactions? By analyzing the initial public announcements of mergers and acquisitions (M&As) from 1995 through 2020 and extracting the linguistic sentiment from statements made by managers of target and acquirer firms, we provide new evidence on the informational value of M&A disclosures. We find that positive sentiment by the target firm results in positive returns for the target. However, when the target firm disagrees with the sentiment of the acquirer, this results in lower returns for the target. Further, when the target displays positive sentiment, this increases the likelihood of merger completion and shortens the time to completion of the deal. We decompose acquirer sentiment into manipulative and fundamental components and demonstrate that acquirer CEOs with low confidence produce M&A statements that are more manipulative. This suggests that, while sentiment in M&A disclosures contains information about fundamentals and managerial attitudes, it can be manipulated to protect the personal interests of managers. Keywords: M&A; Initial public announcements; Textual analysis; Sentiment; Disagreement; CEO overconfidence (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:82:y:2023:i:c:s0929119923001141 DOI: 10.1016/j.jcorpfin.2023.102465 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
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