Institutional Trading Around M&A Announcements

54 Pages Posted: 7 May 2019

See all articles by Eliezer M. Fich

Eliezer M. Fich

Drexel University - Department of Finance

Viktoriya Lantushenko

Saint Joseph's University

Clemens Sialm

University of Texas at Austin - McCombs School of Business; National Bureau of Economic Research (NBER); AQR Capital Management, LLC

Date Written: May 2019

Abstract

Takeover targets often experience substantial share price appreciations around public announcements of mergers and acquisitions. We analyze hedge fund and mutual fund holdings around takeover announcements to assess the differences in investment strategies across institutions. Our results indicate that hedge funds in the aggregate increase their holdings of soon-to-be takeover targets by 7.2% during the quarter prior to the public announcement. Conversely, mutual funds reduce their equity holdings in impending targets by 3.0% during the quarter before M&A announcements and therefore potentially forgo profitable investment opportunities.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Fich, Eliezer M. and Lantushenko, Viktoriya and Sialm, Clemens, Institutional Trading Around M&A Announcements (May 2019). NBER Working Paper No. w25814. Available at SSRN: https://ssrn.com/abstract=3383313

Eliezer M. Fich (Contact Author)

Drexel University - Department of Finance ( email )

LeBow College of Business
3220 Market Street – 11th Floor
Philadelphia, PA 19104
(215) 895-2304 (Phone)

Viktoriya Lantushenko

Saint Joseph's University ( email )

5600 City Avenue,
Philadelphia, PA 19131
United States

Clemens Sialm

University of Texas at Austin - McCombs School of Business ( email )

Austin, TX 78712
United States

HOME PAGE: http://faculty.mccombs.utexas.edu/Clemens.Sialm/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

AQR Capital Management, LLC ( email )

Greenwich, CT
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
4
Abstract Views
132
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information