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Communication Dans Un Congrès Année : 2015

Analysts' forecast revisions and informativeness of the acquirer's stock after M&A transactions

Résumé

Are mergers and acquisitions significant events that develop informativeness? Is the informativeness process the same in different countries? Looking only at cumulative abnormal returns (CARs) is insufficient and the results are sometimes contradictory. To answer to these questions we use the concept of informativeness to assess whether acquisitions improve the private information content of stock prices. We consider a sample of mergers and acquisitions in the US and Europe over the 2000–2013 period. We gauge informativeness by using different measures. First, we refer to the use of the synchronicity measure introduced by Roll (1988). We also refer to Amihud’s (2002) illiquidity ratio and the Llorente et al.’s (2002) measure of informed trading to proxy informativeness. We relate these three measures to the analysts’ activity to forecast EPS. We show that the disclosure process is partially linked to the sign and magnitude of the acquirer’s abnormal return (CARs) at the announcement date. Informativeness of the stock price does not improve systematically between before and after the acquisition. It changes asymmetrically depending on the upward or downward forecast revisions after the acquisition.
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Dates et versions

hal-01505385 , version 1 (11-04-2017)

Identifiants

  • HAL Id : hal-01505385 , version 1

Citer

Hubert de La Bruslerie. Analysts' forecast revisions and informativeness of the acquirer's stock after M&A transactions. 24th European Financial Management Association Annual Meeting - EFMA 2015, Jun 2015, Amsterdam, Netherlands. pp.61. ⟨hal-01505385⟩
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