Daily Archives: September 8, 2010

John Gapper

As I noted the other day, there has been an upsurge in not only mergers and acquisitions but in hostile bids. There are many possible reasons – rising confidence following the financial crisis, companies being cash-rich, etc – but here is an alternative one: testosterone.

We are familiar with dominant chief executives who want to get their own way, but an academic study has found that young CEOs with high levels of testosterone are not only more likely to launch bids but more likely either to withdraw a bid in anger or to launch a hostile tender offer.

The researchers at the University of British Columbia did not actually test the CEOs in their study for levels of testosterone (they used age as a proxy) and my first reaction was to wonder if they were constructing a good story.