The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune
Filipovic, Zoran; Wagner, Alexander (2022), The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune, The 7th Inter Business-School Finance Seminar, 2022-04, Sophia Antipolis, France
TypeCommunication / Conférence
External document linkhttps://dx.doi.org/10.2139/ssrn.3330623
Conference titleThe 7th Inter Business-School Finance Seminar
Conference citySophia Antipolis
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Abstract (EN)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. The value of these deals to the acquirer, as shown by abnormal announcement returns, is questionable: One standard deviation more in intangibles talk lowers returns by 0.50 percentage points. Agency problems explain little of these results. Rather, the cross-section of announcement returns, payment mode choices, and insider trades suggest that intangibles talk reflects managerial overoptimism. In sum, takeover announcements reveal important information regarding the quality of deals.
Subjects / KeywordsCorporate announcements; Intangible assets; Intangibles talk; Mergers and acquisitions; Takeovers; Textual analysis
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