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Do managers keep their word? the disclosure of merger intention at pre-merger issuance and M&A performance.

Guo, M. and Hu, N. and Li, L. and Wang, X. (2019) 'Do managers keep their word? the disclosure of merger intention at pre-merger issuance and M&A performance.', Finance research letters., 28 . pp. 20-31.

Abstract

This paper investigates whether disclosing merger intention at the announcement of equity/debt issuance has an impact on subsequent M&A transactions. We find that companies tend to issue higher proceeds when they reveal their merger intentions, and, subsequently, they are more likely to complete the merger deal itself and pay a higher bid premium. However, we did not find a significant difference in merger performance between firms revealing merger intention and others. Our finding is consistent with the capital need theory.

Item Type:Article
Full text:(AM) Accepted Manuscript
Available under License - Creative Commons Attribution Non-commercial No Derivatives.
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Status:Peer-reviewed
Publisher Web site:https://doi.org/10.1016/j.frl.2018.03.007
Publisher statement:© 2018 This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Date accepted:16 March 2018
Date deposited:19 March 2018
Date of first online publication:21 March 2018
Date first made open access:21 March 2019

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