Managerial attitudes and takeover outcomes: Evidence from corporate filings

Shan Yan

Journal of International Financial Markets, Institutions and Money, 2015, vol. 35, issue C, 30-44

Abstract: We examine the textual content of merger and acquisition related SEC filings in an effort to understand the role of managerial attitudes and beliefs in merger negotiations and outcomes. Using a textual algorithm to identify the degree to which filings of bidders and targets exhibit negative/cautious tones vs positive/optimistic tones, we find that bidders employing the most optimistic language in their filings actually experience the worst long-run performance following the transactions. In contrast, bidding managers who appear to acknowledge and understand the risks of the transactions experience relatively better post-merger performance. Thus our analysis of the textual content of merger filings appears to give us a new method for investigating the role of bidder and target attitudes and beliefs on merger outcomes.

Keywords: Merger acquisition; Corporate performance; Corporate filing (search for similar items in EconPapers)
JEL-codes: G02 G32 G34 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:35:y:2015:i:c:p:30-44

DOI: 10.1016/j.intfin.2014.11.017

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