We study the information gathering process around mergers by examining institution-matched IP addresses accessing Form 8-K filings for merger agreements. Attention to these filings measures merger-related uncertainty and is associated with both portfolio decisions and deal outcomes. We find that attention from investment management firms, in particular, reveals characteristics of the merger, as it is related to the eventual withdrawal of the deal or the involvement of an activist. Investment firm attention is also linked to portfolio changes, especially when that attention is new. Finally, we show that soft information in the filing text helps explain both the decision to learn about a merger and the likelihood that the deal is ultimately withdrawn.
Aiken et al. (Sun,) studied this question.