Difesa dottorato Rudi Palmieri

L'ILS è lieto di annunciare che Rudi Palmieri ha difeso la sua tesi di dottorato dal titolo:

The arguments of corporate directors in takeover bids. Comparing argumentative strategies in the context of friendly and hostile offers in the UK market.

Extended abstract:
The importance of financial communication is justified in general by the relevance of information for making sound investment decisions (cf. Healy & Palepu 2001; Williams 2008). But, information is a crucial factor insofar as it is an essential component of the argumentative processes on which decisions are built: the soundness of arguments significantly depends on reliable and shared material starting points (van Eemeren & Grootendorst 1992; Rigotti & Greco Morasso 2009, 2010). Now, many scholars have shown that companies do not simply disclose information as they select, elaborate and even manipulate them in order to induce certain investment decisions (Degeorge et al. 1999; Dechow & Skinner 2000; Merkl-Davies & Brennan 2007). There is, however, scarce awareness of the argumentative dimension that characterizes numerous activities of financial communication. Through an argumentative discourse, information is inferentially "put at work" in order to justify an opinion, or, as often is the case in finance, in order to persuade an audience of the expediency of a proposed transaction.

The quality of the crucial decisions entailed by takeover bids, in which one company (the bidder) proposes to the shareholders of another company (the target) to tender their shares, largely depends on the information that corporate directors make available (cf. Sudarsanam 1995; Brennan et al. 2010). A relevant question becomes, thus, understanding whether and how corporate directors attempt to influence shareholders' decision by means of argumentation, inviting them to accomplish a certain inference on the basis of the provided information (ch. 2).

In order to answer this question, the dissertation has considered takeover bids made to firms listed in the UK market, regulated by the City Code on Takeovers and Mergers.

The takeover bid has been conceived of in terms of activity type (Levinson 1992; Rigotti & Rocci 2006, van Eemeren 2010), undertaken by the bidder in order to obtain the desired modification of the concerned social reality (ch. 3). This reconstruction identifies the main interagents involved and the institutional commitments imposed to them by the Code. The target directors play here a decisive role because they may recommend shareholders accept or  reject the offer (cf. Morck et al. 1988). Interestingly, the Code not only requires B-and T-directors to disclose relevant information, but also imposes to both of them specific commitments of justification. In particular, B-directors have to give the commercial justification behind the offer, while the T-board has to state the reasons for its recommendation.

The argumentative analysis (ch. 4) of different documents pertaining to 20 cases of takeover bids (launched in the 2006-2010 period) has brought to light how directors, through various strategies, fulfill their argumentative obligations and simultaneously try to persuade shareholders. Crucial differences have emerged by comparing cases in which the offer was recommended by the T-board (friendly bids) and cases in which the bid was opposed (hostile bids).

In friendly bids, the agreement previously sealed by the two boards brings about a coordinated communication. The bidder justifies the intended corporate acquisition without advancing its opinion about the offer. T-directors argumentatively supports the offer's acceptance indirectly, by outlining the reasons having motivated their decision. The arguments chosen from the topical potential pertain both to the strictly financial aspects and to the consequences that the implied acquisition will have on the target company. The often ambiguous presentation of these two types of arguments makes it difficult to understand whether the latter concern also shareholders or only the other stakeholders.

In hostile bids, both sides develop their own argumentative discourse and partially attack the other's arguments. The arising argumentative battle mainly centers on the financial aspects. The strategic maneuvering of directors is mainly focused on the opening stage. Here, typically, the argumentative dispute comes to affect the endoxical background assumptions relating to which information become relevant for decision (e.g. criteria for valuation, assumptions justifying profit forecasts and other predictions, etc.).

These outcomes suggest that argumentation relevantly affects the process through which the eventual decision is made. Further research is needed to verify more in depth this aspect. In particular, the results of this dissertation may be further exploited in interdisciplinary studies aiming to assess financial decisions also in its argumentative dimension.