About half of all merger deals between public US acquirers and targets involve a conference call within two days of the deal announcement, in order to communicate information to both acquirer and target shareholders to garner voting support and mitigate legal liability. Calls are associated with positive market reactions and a higher likelihood of deal completion. However, for public targets, only the latter result holds after correcting for endogeneity. Using a probabilistic topic modelling approach, we identify 20 highly interpretable topics as prevalent in the presentations and discussions recorded in the transcripts. The relative importance of several of these in a deal transcript is associated with target characteristics (e.g., whether the target is a private or a public firm), the method of payment, and acquirer characteristics (e.g., governance). The importance of several topics is associated with significant abnormal returns on deal announcement, and with deal completion likelihood. Questions? Contact Professor Ali Akyol firstname.lastname@example.org
Fangyuan Ma is an assistant professor in finance at the HSBC Business School of Peking University. She obtained her Ph.D. degree at the Hong Kong University of Science and Technology and visited the University of Michigan as a visiting Ph.D. student. Her main research interests are mergers and acquisitions, CEO compensation, and product market competition. She previously worked as a postdoc fellow at the Chinese University of Hong Kong. Her working papers have been presented at AEA, AFA (scheduled), WFA, EFA, SFS Cavalcade, CICF, FMA, NFA, and other major conferences. Her research has been featured by CLS Blue Sky Blog and CPI Competitional Policy International. She currently teaches Corporate Finance and Corporate Governance at the master level.