Information Transmission between Banks and the Market for Corporate Control
-
Series
-
Speaker(s)Farzad Saidi (University of Bonn, Germany)
-
FieldFinance, Accounting and Finance
-
LocationTinbergen Institute Amsterdam, room 1.01
Amsterdam -
Date and time
October 26, 2022
12:45 - 14:00
Abstract
This paper provides evidence of deliberate private-information disclosure within banks’ international business networks. Using supervisory trade-level data, we show that banks with closer ties to a target advisor in a takeover buy more stocks of the target firm prior to the deal announcement, enabling them to benefit from the positive announcement return. We do not find such effects for bank connections to acquirer advisors or for trades in acquirer stocks. Target advisors benefit from leaking information about takeover bids to connected banks, as it drives up the final offer price without compromising the probability of bid succes. Christian Bittner, Falko Fecht, and Melissa Pala.
Personal website of the speaker.