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Does investor sentiment impact premiums in M&A transactions?

Author

Listed:
  • Fabrice Hervé

    (CREGO - Centre de Recherche en Gestion des Organisations - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE])

  • Ibtissem Rouine

    (IDRAC Business school Lyon - Institut pour le Développement et la Recherche d'Action Commerciale - Université de Lyon)

  • Mohamed Firas Thraya

    (IDRAC Business school Lyon - Institut pour le Développement et la Recherche d'Action Commerciale - Université de Lyon)

  • Mohamed Zouaoui

    (CREGO - Centre de Recherche en Gestion des Organisations - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE])

Abstract

This paper examines the impact of investor sentiment on merger outcomes, in particular on bid premiums. Using international data from 54 countries between 2000 and 2021, our results show that investor sentiment has a positive effect on bid premiums. Our findings also suggest that the association between investor sentiment and bid premiums is more pronounced in countries culturally prone to herd-like behavior and overreaction. However, this effect is reduced both in countries with highly efficient institutions and in serial deals. Our results are robust to several checks.

Suggested Citation

  • Fabrice Hervé & Ibtissem Rouine & Mohamed Firas Thraya & Mohamed Zouaoui, 2024. "Does investor sentiment impact premiums in M&A transactions?," Post-Print hal-04646228, HAL.
    • Handle: RePEc:hal:journl:hal-04646228
    DOI: 10.59876/a-hy8x-rmwg
    as

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