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Earnings management around UK open offers

Iqbal, Abdullah, Espenlaub, Susanne, Strong, Norman (2009) Earnings management around UK open offers. European Journal of Finance, 15 (1). pp. 29-51. ISSN 1351-847X. (doi:10.1080/13518470701705652) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:9654)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided.
Official URL
http://dx.doi.org/10.1080/13518470701705652

Abstract

We examine the long run operating and stock price performance of UK open offer firms in the

context of the earnings management hypothesis.We find that in the pre-offer period offer firms report significant

improvements in their operating performance unrelated to cash flow performance. Results on return

performance show that offer firms outperform various benchmarks in the pre-offer year but underperform

up to four years after the offer. Regression results show that pre-offer discretionary current accruals predict

the long-run post-offer return underperformance but do not predict the short-run reaction to SEO announcements.

Our findings are more consistent with the earnings management hypothesis than with either the timing

hypothesis or the managerial response hypothesis and suggest that investors do not take full account of the

information available at the time of open offers.

Item Type: Article
DOI/Identification number: 10.1080/13518470701705652
Uncontrolled keywords: Earnings management, open offers, SEOs, return performance, operating performance
Subjects: H Social Sciences > HG Finance
Divisions: Divisions > Kent Business School - Division > Department of Accounting and Finance
Depositing User: Abdullah Iqbal
Date Deposited: 18 Mar 2009 17:52 UTC
Last Modified: 16 Nov 2021 09:48 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/9654 (The current URI for this page, for reference purposes)
Iqbal, Abdullah: https://orcid.org/0000-0002-3013-1007
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