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An empirical examination of forecast disclosure by bidding companies
Author(s)
Date Issued
2000
Date Available
2011-04-28T15:36:23Z
Abstract
This paper examines voluntary disclosure of profit forecasts by bidding companies during takeovers. Disclosure is examined from two perspectives: (i) factors influencing disclosure and (ii) the influence of good news and bad news on disclosure.
Takeover documents published during 701 takeover bids for public companies listed on the London Stock Exchange in the period 1988 to 1992 were examined.
Two variables accounted for almost all the influences on disclosure of forecasts: bid horizon and type of bid. Probability of forecast disclosure was greater the shorter the bid horizon and during contested bids. In addition, there was some evidence that the nature of the purchase consideration offered by the bidder (cash or paper) and the industry of the bidder influenced disclosure. Disclosure was significantly more likely in paper bids and in the durable goods industry.
Forecasts were more likely to be disclosed when firms had good news to report.
Sponsorship
Not applicable
Type of Material
Journal Article
Publisher
Croner.CCH
Journal
Accounting and Business Research
Volume
30
Issue
3
Start Page
175
End Page
194
Subject – LCSH
Disclosure of information
Consolidation and merger of corporations
Corporation reports
Business communication
Corporate profits--Forecasting
Language
English
Status of Item
Peer reviewed
This item is made available under a Creative Commons License
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04_08 Brennan An Empirical Examination of Forecast Disclosure by Bidding Companies.pdf
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