Heterogeneity in the information content of 8-K disclosures about private targets: Acquirer size and target significance

Onur Bayar, Sougata Das and Emre Kesici

Global Finance Journal, 2021, vol. 48, issue C

Abstract: In this paper, we empirically analyze the disclosures required by the Securities Exchange Commission (SEC) for acquisitions of privately held target firms by public acquirers. We find that 8-K disclosures filed by public acquirers within a week after the announcement date of the takeover of a privately held target firm materially affect the pricing and the trading of the acquirers' shares around the event date, but only for large acquiring firms. This impact is economically significant even for targets classified as “insignificant” by the SEC, but again, only for large acquirers. Our results suggest that it may be optimal to further reduce the disclosure costs faced by smaller acquirers in acquisitions of private targets.

Keywords: Takeovers of private targets; Public acquirers; Mergers and acquisitions; Disclosure requirements; Information transparency (search for similar items in EconPapers)
JEL-codes: G14 G20 G34 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:48:y:2021:i:c:s1044028319303102

DOI: 10.1016/j.gfj.2020.100559

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