Stock returns around acquisition announcements are widely viewed as being reflective of the net present value created by these transactions. As such, announcement returns should correlate with acquisition outcomes. Using a new measure of realized transaction-level acquisition failure, as well as...

This study analyzed activism that leads to a merger or acquisition (M&A) of a firm to see its benefits for the shareholders at the target firm as well as its acquirer. It used over thirty years of data to understand the impact of the activists’ demands of strategic significance for the firms....

We find, in a sample of 7,581 merger offer announcements from 1990 to 2013, shareholders of 1,283 (or 17%) target firms responded to the offer with negative market returns. These investors were disappointed at the offer, despite the price premium. To explain their disappointment, one must...

We study the impact of accelerated vesting of equity awards on takeovers, whereby the restricted stock and/or stock options of the target CEO immediately vest and become unrestricted upon the close of the acquisition. We find that takeover premiums are significantly larger when the target CEO...

Takeover speculation may hurt productivity because uncertainty and threat of job loss cause anxiety, distraction, and reduced collaboration and morale among employees. Using a large panel of OECD-headquartered firms, we show that firm productivity temporarily declines after announcements of...

We show that productivity at both the firm and employee (i.e., analyst and inventor) level temporarily declines upon announcements of takeover rumors that do not materialize. Such speculative news may hurt productivity because uncertainty and threat of job loss cause anxiety, distraction, and...

Speculative news on corporate takeovers may hurt productivity because uncertainty and threat of job loss cause anxiety, distraction, and reduced collaboration and morale among employees and managers. Using a panel of OECD-headquartered firms, we show that firm productivity temporarily declines...

Using a large database of U.S. mergers and acquisitions (M&As) announced from 2010 through 2017, we examine the effects of capital ratio (leverage) on the announcement period stock price reaction as well as on longer-term stock returns and performance, for banks, making comparisons with...

This study documents economically meaningful and persistent financial advisor fixed effects in target firms’ abnormal stock returns shortly prior to takeover announcements.Additional difference-in-differences analyses suggest that advisors are associated with lower pre-bid stock returns after...

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. Deals presented with more “intangibles talk” complete more quickly. However, the value of these deals to...