No News is Good News! Media Coverage and Corporate Takeover Characteristics

Abstract

The purpose of this study is to empirically examine the relation between a target firm’s media coverage (measured by degree of media coverage, positive and negative media coverage) and various takeover characteristics. We find that media coverage is negatively associated with the takeover premium. This holds for both positive and negative media coverage. Thus, no news is good news in terms of achieving a higher takeover premium. The method of payment shows an ambiguous relation with media coverage. All three measures of media coverage have a positive effect on the time of completion.

Keywords: Mergers and acquisitions; media coverage; premium; method of payment; time of completion; information asymmetry

JEL Classification: G34, G30, L82, D82