Journal article
Bidder earnings forecasts in mergers and acquisitions
- Abstract:
- This study finds that pro-forma earnings forecasts by bidding firms during acquisitions are associated with a higher likelihood of deal completion, expedited deal closing, and with a lower acquisition premium − but only in stock-financed acquisitions. Analysts also respond to these forecasts by revising their forecasts for the bidder upward. However, the benefits of forecast disclosure only accrue to bidders with a strong forecasting reputation prior to the acquisition. Explaining why not all bidders forecast, we document a higher likelihood of post-merger litigation and CEO turnover for bidders with a weak forecasting reputation and for those that underperform post-merger.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
Actions
Access Document
- Files:
-
-
(Preview, Accepted manuscript, pdf, 800.5KB, Terms of use)
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- Publisher copy:
- 10.1016/j.jcorpfin.2019.06.002
Authors
- Publisher:
- Elsevier
- Journal:
- Journal of Corporate Finance More from this journal
- Volume:
- 58
- Pages:
- 373-392
- Publication date:
- 2019-06-10
- Acceptance date:
- 2019-06-07
- DOI:
- ISSN:
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0929-1199
- Language:
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English
- Keywords:
- Pubs id:
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pubs:1011179
- UUID:
-
uuid:ac1a61b8-84fc-4448-b209-17740e7db341
- Local pid:
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pubs:1011179
- Source identifiers:
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1011179
- Deposit date:
-
2019-06-11
Terms of use
- Copyright holder:
- Amel-Zadeh and Meeks
- Copyright date:
- 2019
- Rights statement:
- © 2019 Published by Elsevier B.V.
- Notes:
- This is the accepted manuscript version of the article. The final version is available online from Elsevier at https://doi.org/10.1016/j.jcorpfin.2019.06.002
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