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Can financial media sentiment predict merger and acquisition performance?

Yang, B. and Sun, J. and Guo, M.J. and Fu, J. (2019) 'Can financial media sentiment predict merger and acquisition performance?', Economic modelling., 80 . pp. 121-129.


This paper explores whether and how media serves as an information intermediary in the capital market and predicts value creation from mergers and acquisitions (M&As). Using a sample of 288 M&A deals in the U.S. market from 2000 to 2015, this paper examines whether pre-merger news about acquirers correlates to M&A performance. The empirical evidence shows that a positive media attitude before merger announcements has predictive power for stock returns in both the short and long run. Moreover, media pessimism is associated with higher bid premiums, meaning that acquirers must raise the bid price to offset the negative effects produced by the media. These findings suggest that media news contains information relevant to M&A performance and thus has implications for shareholder wealth.

Item Type:Article
Full text:(AM) Accepted Manuscript
Available under License - Creative Commons Attribution Non-commercial No Derivatives.
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Publisher statement:© 2018 This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Date accepted:23 October 2018
Date deposited:24 October 2018
Date of first online publication:29 October 2018
Date first made open access:29 October 2019

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