Extraordinary Acquirers Discussant: Chao Chen Fudan University

Contributions Can acquirers persistently generate positive announcement returns in takeovers (extraordinary acquirer)? Yes, 14.9 percent of US acquirers in are extraordinary acquirers. Top quality management team explains persistent acquirer gains.

Main findings  The Tenure and tenure heterogeneity of the top team are the determinants of extraordinary acquirer status.  Increasing the size, tenure and tenure heterogeneity of the top team, normal acquirers can achieve extraordinary status.

Main findings Extraordinary acquirers prefer subsidiary targets and cash deals.

Comments New evidence on acquirers: Some of them are persistently better than normal acquirers Evidence on the reason why some of the acquirers are persistently better: top quality management team Evidence on the characteristics and determinants of extraordinary acquirers

Comments In the process of searching takeover targets, external team (such as financial advisor and investment bank) may play an even more important role than the internal management team. Incorporate the quality or reputation of external team into your empirical model.

14.9% vs. 85.1% control sample Compare extraordinary acquirers and matched sample instead of all normal acquirers. Table 7 indicates that the probability of moving from extraordinary acquirers to normal acquirers are as high as 40.84% and the average time taken to switch is years. On the other hand, the probability to switch from normal acquirers to extraordinary acquirers is as low as 3.20% and the average time taken to switch is years. It may be interested in see what factors caused extraordinary acquirers to move down? Are the quality and the tenure of the internal management team different?

Questions The free cash flow of extraordinary acquirers is significantly greater than that of normal acquirers, but it was not included in the main empirical tests of Tables 4, 5, 6, and 7. The correlation matrix of Table 3 is limited to a few variables without FCF.

Final remark A good and interesting topic. Some findings are promising and important to existing literature. A few more empirical tests and sensitive analyses will make the paper better..