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Do managers keep their word? The disclosure of merger intention at pre-merger issuance and M&A performance
journal contribution
posted on 2023-06-10, 02:12 authored by Jie (Michael) Guo, Lu Li, Nan Hu, Xing WangThis 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.
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Publication status
- Published
File Version
- Published version
Journal
Finance Research LettersISSN
1544-6123Publisher
ElsevierExternal DOI
Volume
28Page range
20-31Department affiliated with
- Accounting and Finance Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2022-01-06First Compliant Deposit (FCD) Date
2022-01-05Usage metrics
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