Strategic M&A Announcement Timing: Evidence from Merger Monday
Filipovic, Zoran (2021), Strategic M&A Announcement Timing: Evidence from Merger Monday, 37th Spring International Conference of the French Finance Association, 2021-05, Nantes / Online, France
TypeCommunication / Conférence
Conference title37th Spring International Conference of the French Finance Association
Conference cityNantes / Online
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Dauphine Recherches en Management [DRM]
Abstract (EN)Drawing on the day of the week pattern of mergers and acquisitions, I investigate whether managers engage in strategic announcement timing, and if so, whether such a decision pays off. The findings are consistent with managers timing M&A announcements as they seek to avoid the anticipated unfavorable market reaction. I document that this strategy is related to higher stock returns when managers attempt to avoid periods of low investor attention. However, the analysis reveals no evidence of significant gains when the managerial decisive factor is the possibility that the market might interpret the announcement as bad news. Furthermore, I find that strategic timing and negotiation complexity help explain the prevalence of merger announcements on Mondays (the Merger Monday phenomenon)and its flip side, a low percentage of M&A announcements on Friday.
Subjects / Keywordsmergers and acquisitions; market reaction; market sentiment
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