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Heterogeneity in the information content of 8-K disclosures about private targets: Acquirer size and target significance

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  • Bayar, Onur
  • Das, Sougata
  • Kesici, Emre

Abstract

In this paper, we empirically analyze the disclosures required by the Securities Exchange Commission (SEC) for acquisitions of privately held target firms by public acquirers. We find that 8-K disclosures filed by public acquirers within a week after the announcement date of the takeover of a privately held target firm materially affect the pricing and the trading of the acquirers' shares around the event date, but only for large acquiring firms. This impact is economically significant even for targets classified as “insignificant” by the SEC, but again, only for large acquirers. Our results suggest that it may be optimal to further reduce the disclosure costs faced by smaller acquirers in acquisitions of private targets.

Suggested Citation

  • Bayar, Onur & Das, Sougata & Kesici, Emre, 2021. "Heterogeneity in the information content of 8-K disclosures about private targets: Acquirer size and target significance," Global Finance Journal, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:glofin:v:48:y:2021:i:c:s1044028319303102
    DOI: 10.1016/j.gfj.2020.100559
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    More about this item

    Keywords

    Takeovers of private targets; Public acquirers; Mergers and acquisitions; Disclosure requirements; Information transparency;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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