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...

Profit forecasts are rarely disclosed in the UK except in prospectuses, circulars and during takeover bids. There are few regulations governing the content of profit forecasts. Under stock exchange rules these forecasts must be reported on by both reporting accountants and the merchant bankers...

We use bivariate ARCH specifications to model the conditional mean and stock price volatilityfor 56 takeover bids from January 1985 and July 1994. Using daily data from one year prior to thetakeover announcement until the conclusion of the bid, we allow for two-way interaction in bothmoments...