Salience, Awareness, and the Takeover Attraction Effect of Information Bundling

35 Pages Posted: 26 Oct 2021 Last revised: 2 Aug 2022

See all articles by Tian Qiu

Tian Qiu

University of Alabama - Department of Economics, Finance and Legal Studies

Date Written: April 1, 2021

Abstract

Firms often bundle announcements of corporate events, such as dividend changes and repurchases, together with quarterly earnings news. This paper studies the real consequence of this disclosure practice in the context of the market for corporate control. I find bundled repurchase announcements significantly increase the announcer's likelihood of becoming a takeover target. Daily Bloomberg news readership data confirm increased awareness is a channel for this effect. Consistent with this channel, targets in bundling-induced takeovers are ex-ante less visible. This result suggests, in addition to the short-run price impact, information bundling has important long-run real effects.

Keywords: Repurchase, Earnings, Investor Attention, M&A

JEL Classification: G34, G35, M41

Suggested Citation

Qiu, Tian, Salience, Awareness, and the Takeover Attraction Effect of Information Bundling (April 1, 2021). Proceedings of Paris December 2021 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: https://ssrn.com/abstract=3949554 or http://dx.doi.org/10.2139/ssrn.3949554

Tian Qiu (Contact Author)

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States

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