Pre‐IPO Acquirers’ Issuance Cost and Long‐Run Performance: Do Their M&A Disclosures Matter?
研究了IPO前进行并购活动的公司，其发行成本更高且长期表现更差，而招股说明书中披露并购信息能部分改善投资者估值。
Abstract: This paper investigates whether the activities and disclosures of mergers and acquisitions (M&As) preceding initial public offerings (IPOs) are associated with issuers’ (1) issuance cost and (2) long‐run performance. The results show that pre‐IPO acquirers have higher opportunity costs of issuance (OCI) than their matching companies (without pre‐IPO M&As) but their underpricing does not differ significantly, indicating that they tend to raise more funds by issuing a greater number of shares. This action can be due to issuers’ intention to undertake more M&As or fear of their inability to successfully issue equity in the future. We also find that pre‐IPO acquirers underperform their matching companies in the long run, with those undisclosing M&A information in the prospectus performing worse than those who did. These results reveal that investors’ valuation of disclosing pre‐IPO acquirers is lower, but not low enough, because they underestimate the difficulty of M&A integration. Further, investors overvalue undisclosing acquirers more seriously because they know little about their pre‐IPO M&A activities. These phenomena suggest that information disclosure in the prospectus does affect investors’ valuation.