News: Seminari

Seminario di Luc Paugam

ore 12.30 Aula della Scuola di Dottorato, Palazzo Cà Borin, Via del Santo 22

15.06.2017

Do managers walk the talk? Disclosure in M&A announcement press releases and quality of the deal

Seminario di Luc Paugam, HEC

We investigate the relation between disclosures provided by acquirers about growth, synergies and intangible resources in mergers and acquisitions (M&A) announcement press releases and the characteristics of M&A deals. Specifically, we examine whether and how forms of language such as the terms about intangible resources acquired (key value drivers) that are used in announcement press releases relate to the quality of acquisitions. We find that soft disclosures about value drivers are consistent with assets recognized in acquirers’ financial statements. Next, we study the association between the terms about value drivers and five measures of deal quality. Using stock returns at announcement, subsequent goodwill impairment, Tobin’s Q, change in return on assets, and operating cash flows, we find that managers use terms related to growth, synergies and intangible resources for lower quality acquisitions more frequently. This evidence is consistent with managerial overconfidence and impression management.