Investor attention and market reactions to early announcements in mergers and acquisitions
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Volume
91
DOI
10.1016/j.irfa.2023.102993
Journal
International Review of Financial Analysis
ISSN
1057-5219
Metadata
Show full item recordAbstract
We focus on the market reaction to early announcements in mergers and acquisitions and find that acquiring firms attract substantial investor attention with their early announcements. The positive relationship between early announcements and takeover short-term value effect is more pronounced for early-announced deals with greater investor attention toward deal announcements. However, this relation is reversed after merger integration, leading to a lower long-run firm value. For early-announced deals with low investor attention, neither the boosting effect of short-term value effect nor the price reversal in the long run exists. Our findings support the price pressure hypothesis for early announcements.
Authors
Muradoglu, G; Peng, N; Qin, H; Xia, CCollections
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