 What’s really in a deal? Evidence from textual analysis of M&A conference callsWenyao Hu, Thomas Shohfi and Runzu Wang Review of Financial Economics, 2021, vol. 39, issue 4, 500-521 Abstract: Using a sample of 814 transcripts from 2011 to 2018, we examine information within merger and acquisition conference calls. Textual analysis reveals significant differences between the content of M&A call transcripts and both contemporaneous corporate press releases and prior earnings conference calls. We find participation of target executive types in M&A calls occurs more frequently in diversifying acquisitions and is related to payment choice consistent with promoting managerial sector‐specific skills and incentive alignment, respectively. Retention of participating target executives is associated with a negative market reaction. We also identify a negative relation between textual sentiment and market reaction consistent with a response to higher levels of information asymmetry. Greater quantitative information, however, is positively related to the market reaction of M&A calls. We develop targeted M&A motive dictionaries to identify financial and strategic content within call transcripts. Consistent with prior literature on merger motivation, deals with more finance (strategy)‐oriented words have a higher (lower) market reaction. Overall, our results show that deal‐related textual analysis explains a highly significant and economically important component of gains/losses to acquirers. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wly:revfec:v:39:y:2021:i:4:p:500-521 Access Statistics for this article More articles in Review of Financial Economics from John Wiley & Sons |
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