Does continuous disclosure affect the market reaction to mergers and acquisitions announcements?

Article

Shams, Syed, Bose, Sudipta, Gunasekarage, Abeyratna and Velayutham, Eswaran. 2024. "Does continuous disclosure affect the market reaction to mergers and acquisitions announcements?" Pacific-Basin Finance Journal. https://doi.org/10.1016/j.pacfin.2024.102540
Article Title

Does continuous disclosure affect the market reaction to mergers and acquisitions announcements?

ERA Journal ID32913
Article CategoryArticle
AuthorsShams, Syed, Bose, Sudipta, Gunasekarage, Abeyratna and Velayutham, Eswaran
Journal TitlePacific-Basin Finance Journal
Year2024
PublisherElsevier
Place of PublicationNetherlands
ISSN0927-538X
Digital Object Identifier (DOI)https://doi.org/10.1016/j.pacfin.2024.102540
Web Address (URL)https://www.sciencedirect.com/science/article/pii/S0927538X24002920
Abstract

We examine the association between the degree of continuous disclosure by bidders and the market reaction to the announcement of 3512 mergers and acquisitions (M&As) by Australian bidders during the period 2000–2017. Using four proxies for continuous disclosure (total number of disclosures, total number of sensitive disclosures, total number of pages, and total number of sensitive pages), we find a positive association between the market reaction to M&A announcements and the level of continuous disclosure made by bidders. These findings imply that investors, when assessing M&A deals, find bidders' disclosures to be informative and value relevant. Further analyses reveal that this positive association is more pronounced for private target acquisitions, stock-financed acquisitions, and unrelated acquisitions.

KeywordsContinuous disclosur; market reactiion; mergers and acquisition; abnormal returns
Contains Sensitive ContentDoes not contain sensitive content
ANZSRC Field of Research 2020350299. Banking, finance and investment not elsewhere classified
Byline AffiliationsSchool of Business
University of Newcastle
Monash University
School of Commerce
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