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

Department of Law and Economics, Darmstadt University of Technology, Hochschulstrasse 1, D-64289 Darmstadt, Germany
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Academic Editor: Nicholas Apergis
Int. J. Financial Stud. 2018, 6(1), 5; https://doi.org/10.3390/ijfs6010005
Received: 24 October 2017 / Revised: 11 December 2017 / Accepted: 15 December 2017 / Published: 2 January 2018
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). View Full-Text
Keywords: mergers & acquisitions; conference calls; voluntary disclosure; shareholder protection mergers & acquisitions; conference calls; voluntary disclosure; shareholder protection
MDPI and ACS Style

Fraunhoffer, R.; Kim, H.Y.; Schiereck, D. Value Creation in M&A Transactions, Conference Calls, and Shareholder Protection. Int. J. Financial Stud. 2018, 6, 5.

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