In this paper, we investigate the long-term stock return performance of Canadian acquiring firms in the post-event period by using 1300 M&A events in the 1993–2002 period. We use both event-time and calendar-time approaches and conduct robustness tests for benchmarks, methodological choices, statistical techniques and other related factors such as payment methods. We also assess the role of governance variables. Contrary to stylized facts reported in US studies, neither do we find negative abnormal long-term abnormal stock market returns once we account for methodological discrepancies nor do we find negative long-term operating performance in the post-acquisition periods for the acquirer following an acquisition event. We also find that the Canadian market reacts positively to acquisition announcements but corrects for this reaction within a short period of time. Overall we find that Canadian acquisitions do not show value destruction or overpayment.

This paper demonstrates that firms receiving above-industry-average support in their “say-on-pay” (SoP) votes engage in more M&A transactions in the subsequent year. Our empirical findings suggest that high levels of SoP voting support may boost managerial confidence, thereby stimulating increased pursuit of acquisitions. Moreover, we observe that managers garnering higher SoP vote support are more likely to secure shareholders' backing in M&A votes, receive higher compensation in successful deals, and face a reduced likelihood of forced turnover following unsuccessful deals. Additionally, we find that both short-term and long-term M&A performance significantly improves in deals announced by managers receiving higher SoP voting support. These findings contribute to our understanding of the relation between shareholder support for CEOs and firm investment.

International audience

We examine the role of institutional investors' investment horizon on the information content associated with dividend announcement surprises in the “dividend-reappearance era”. We find that the presence of institutional investors negatively affects the announcement period cumulative abnormal return (CAR), which suggests that institutional investors reduce information content of dividend announcements. This result is primarily driven by the fact that institutional investors, especially the not-short-horizon investors, do not prefer dividend surprises – which leads to lower announcement period CAR. We do not find support for institutional investors' informed trading argument. Our study reveals that in order to understand the dynamics between institutional ownership and information content of dividend announcements, it is important to differentiate the institutional investors' investment horizons.

We examine whether media coverage affects credit rating change decisions by analyzing 732,426 newspaper items published by top U.S. media outlets on S&P 1500 firms. Our results show that negative media coverage has a strong association with credit rating change events, but positive media coverage does not. We find support for two channels that confirm this finding: the media's fundamental information content and the media's reputational pressure. Credit rating agencies appear to consider the fundamental information embedded in negative media coverage and recognize negative market sentiment when making rating change decisions.