Conference Calls Around Merger and Acquisition Announcements: Do They Reduce Information Asymmetry? UK Evidence

Research in International Business and Finance, vol. 30, pp. 148-172, 2014.

53 Pages Posted: 6 Aug 2013 Last revised: 28 May 2014

See all articles by Georgia Siougle

Georgia Siougle

Athens University of Economics and Business - Department of Accounting and Finance

Spyros I. Spyrou

Athens University of Economics and Business - Department of Accounting and Finance

Andrianos E. Tsekrekos

Athens University of Economics and Business - Department of Accounting and Finance

Date Written: June 1, 2013

Abstract

This paper examines conference call meetings held around merger and acquisition (M&A) announcements in the UK market. Our main findings indicate that conference calls not only facilitate the smoother transmission of M&A-related information in the stock market and smooth the rate of the information flow to the market, but also they reduce informed trading through option markets before M&A events. We also find that there is an inverse relation of analysts’ forecast error and conference call probability, that firms initiate conference calls during M&As when their transactions are large and are facing liquidity constraints, and that the probability of a firm holding a conference call around an M&A is strongly and inversely related to the existence of traded equity options on its stock.

Keywords: Mergers and Acquisitions, Conference Calls, Asymmetric Information, Option Markets, Corporate Governance

JEL Classification: G1, G14, G34

Suggested Citation

Siougle, Georgia and Spyrou, Spyros I. and Tsekrekos, Andrianos E., Conference Calls Around Merger and Acquisition Announcements: Do They Reduce Information Asymmetry? UK Evidence (June 1, 2013). Research in International Business and Finance, vol. 30, pp. 148-172, 2014.. Available at SSRN: https://ssrn.com/abstract=2306096

Georgia Siougle

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece

Spyros I. Spyrou

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece

Andrianos E. Tsekrekos (Contact Author)

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece

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