Abstract
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).
Highlights
In recent years, conference calls emerged to a standard medium of voluntary disclosure (Bushee et al 2003)
Our study aims at filling this gap and obtaining knowledge about whether merger-related conference calls in the most active European mergers and acquisitions (M&A) markets (United Kingdom (UK), France, Germany, Switzerland, and Spain) transmit additional information over the respective press release and thereby induce stock market revaluation
The following analysis is based on a sample of M&A transactions obtained from Thomson One Banker SDC database according to the following requirements: The bidder is a publicly quoted company-based in Europe excluding the Russian Federation and Turkey
Summary
Conference calls emerged to a standard medium of voluntary disclosure (Bushee et al 2003) They are mostly utilized in concordance with earnings announcements to provide detailed and additional information over the respective press release (Tasker 1998; Frankel et al 1999; Matsumoto et al 2011; Bassemir et al 2013; Mayew et al 2013; Green et al 2014a; Cicon 2017). Most research rather focuses on routinely conference calls accompanying earnings releases in the United States (US), whereas conference calls and more generally voluntary disclosure in non-routine situations or outside the US or both are rarely examined and still offer rather mixed results.
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