Value Creation in M&A Transactions, Conference Calls, and Shareholder Protection

Robert Fraunhoffer, Ho Young Kim and Dirk Schiereck
Additional contact information
Robert Fraunhoffer: Department of Law and Economics, Darmstadt University of Technology, Hochschulstrasse 1, D-64289 Darmstadt, Germany
Ho Young Kim: Department of Law and Economics, Darmstadt University of Technology, Hochschulstrasse 1, D-64289 Darmstadt, Germany
Dirk Schiereck: Department of Law and Economics, Darmstadt University of Technology, Hochschulstrasse 1, D-64289 Darmstadt, Germany

IJFS, 2018, vol. 6, issue 1, 1-21

Abstract: This study investigates whether conference calls accompanying M&A announcements in Europe provide valuable information for capital market participants and hence induce an abnormal stock price revaluation on the bidder’s equity. Based on handpicked data for transactions between 2008 and 2012 we focus on the five most acquisitive country markets in Europe. Overall, our results show that bidders are more likely to conduct conference calls with increasing transaction value, for transactions with public targets and non-diversifying transactions. Further, the decision for voluntary disclosure is positively influenced by increased bidder size and the comparably weaker governance systems for German and Swiss firms. After controlling for self-selection bias and other determinants of stock returns around mergers and acquisitions (M&A) announcement, evidence is in strong support that firms with merger-related conference calls yield a higher abnormal return than firms merely publishing a press release. However, significant favourable investor reaction is only present in the UK and French subsamples and in the subsamples of industries with a focus on research and development (R&D).

Keywords: mergers & acquisitions; conference calls; voluntary disclosure; shareholder protection (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7072/6/1/5/pdf (application/pdf)
https://www.mdpi.com/2227-7072/6/1/5/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jijfss:v:6:y:2018:i:1:p:5-:d:125056

Access Statistics for this article

IJFS is currently edited by Ms. Hannah Lu

More articles in IJFS from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().