M&A rumors about unlisted firms

Yan Alperovych, Douglas Cumming, Veronika Czellar, Alexander Groh

    Research output: Contribution to journalArticlepeer-review


    We examine 68,044 completed or abandoned M&A transactions involving unlisted targets to determine the effect of transaction rumors on deal-closing propensity and transaction values. Estimation is challenging because rumors may be spread on purpose or emerge accidentally while transaction values are only observable for completed deals and no regulation requires to disclose them. We use indirect inference to overcome these challenges. We find that (a) M&A rumors are deal breakers, (b) rumored but closed deals have higher transaction values, and (c) the combined economic impact of (a) and (b) is negative: in expectation rumors destroy about 32% of transaction value.
    Original languageEnglish
    JournalJournal of Financial Economics
    Early online date11 May 2021
    Publication statusE-pub ahead of print - 11 May 2021


    • Acquisitions
    • Indirect inference
    • Mergers
    • Rumors
    • Unlisted firms

    ASJC Scopus subject areas

    • Accounting
    • Finance
    • Economics and Econometrics
    • Strategy and Management


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