Do Stock Analysts Influence Merger Completion? An Examination of Postmerger Announcement Recommendations

• 成果类型: Article
• 署名作者: Becher, David A.; Cohn, Jonathan B.; Juergens, Jennifer L.
• 署名单位: Drexel University; University of Pennsylvania; University of Texas System; University of Texas Austin
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2014.2065
• 发表日期: 2015
• 页码: 2430-2448
• 关键词: mergers; analysts; merger success; valuation

摘要

This paper investigates the effects of analyst recommendations issued after a merger announcement on deal completion. We find the probability of completion increases (decreases) with the favorability of acquirer (target) recommendations. Results from instrumental variables tests support causality running from recommendations to merger outcomes. Additional tests suggest that these relations are driven by target shareholders reassessing the merger offer in response to movements in acquirer and target valuations. We also find that favorably recommended firms in a proposed merger underperform following deal resolution, suggesting that investors overreact to postmerger announcement recommendations.