Why Do Firms Bundle Earnings and Acquisition Announcements?

52 Pages Posted: 20 Nov 2017 Last revised: 1 Oct 2019

See all articles by Jose-Miguel Gaspar

Jose-Miguel Gaspar

ESSEC Business School

Laurence Daures

ESSEC Business School

Sumingyue Wang

Shanghai University of Finance and Economics

Date Written: November 16, 2017

Abstract

An increasing fraction of M&A deals are announced on the same day in which the bidder reports its quarterly earnings, a phenomenon we call ‘bundled’ announcements. Compared to other bids, bundled bids are associated with strongly lower bidder announcement returns. We investigate possible reasons for this practice. Our findings indicate that bundling is a tool of strategic disclosure. Reported earnings of bundling acquirers are lower than those of other bidders. Bidders engage in bundling in moments of high investor attention, good earnings reports in the target industry, and when analysts’ views about the firm are divided.

Keywords: Bundling, Strategic Disclosure, Mergers, Earnings

JEL Classification: G14, G30, G34

Suggested Citation

Gaspar, Jose-Miguel and Daures, Laurence and Wang, Sumingyue, Why Do Firms Bundle Earnings and Acquisition Announcements? (November 16, 2017). Proceedings of Paris December 2019 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: https://ssrn.com/abstract=3072286 or http://dx.doi.org/10.2139/ssrn.3072286

Jose-Miguel Gaspar

ESSEC Business School ( email )

Avenue Bernard Hirsch
Cergy-Pontoise, 95021
France
+33 1 3443 3374 (Phone)
+33 1 3443 3212 (Fax)

HOME PAGE: http://www.essec.edu

Laurence Daures (Contact Author)

ESSEC Business School ( email )

3 Avenue Bernard Hirsch
CS 50105
CERGY, CERGY PONTOISE CEDEX 95000
France
+33 1 34 43 33 62 (Phone)
+33 1 34 43 32 12 (Fax)

Sumingyue Wang

Shanghai University of Finance and Economics ( email )

China

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