Is There Information Leakage Around Business Combinations on the French Market?

EFMA 2002 London Meetings

52 Pages Posted: 14 Mar 2002

See all articles by Nihat Aktas

Nihat Aktas

WHU - Otto Beisheim School of Management

Eric de Bodt

NHH

Fany Declerck

University of Toulouse 1

Date Written: March 12, 2002

Abstract

This paper studies informed trading around business combinations on the French market to provide evidence of information leakage. We show that the cumulative abnormal returns and the relative spread exhibit variations thirty days before the announcement. Cumulative selling hidden volume increases more for value-destroying rumour-less cases than for cases with rumours. We then examine the determinants of private information. We find that the level of cumulative abnormal volume before the operation is significantly higher for operations between French firms as compared to the one involving at least one foreign firm.

Keywords: Mergers and Acquisitions, hidden order, informed trading, bid-ask spread, information leakage

JEL Classification: G14, G34

Suggested Citation

Aktas, Nihat and de Bodt, Eric and Declerck, Fany, Is There Information Leakage Around Business Combinations on the French Market? (March 12, 2002). EFMA 2002 London Meetings, Available at SSRN: https://ssrn.com/abstract=303315 or http://dx.doi.org/10.2139/ssrn.303315

Nihat Aktas

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Eric De Bodt (Contact Author)

NHH ( email )

Helleveien 30
Bergen, NO-5045
Norway

Fany Declerck

University of Toulouse 1 ( email )

Universite des Sciences Sociales
Manufacture des Tabacs - MF 308 21, allee de Brienne
31000 Toulouse
France
33 561 128 570 (Phone)
33 561 225 563 (Fax)

HOME PAGE: http://go.to/fdeclerck

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