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

Zoran Filipovic and Alexander Wagner
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Zoran Filipovic: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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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)
Date: 2022-04
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Published in The 7th Inter Business-School Finance Seminar, Apr 2022, Sophia Antipolis, France

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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 (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)
Working Paper: The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune (2019)
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