We provide new insights into the determinants of acquirer announcement returns with a unique sample of targets that are acquired within three years of their IPOs. Existing studies of acquisitions of private and established public targets find positive relations between acquirer announcement...

A great deal of empirical research finds that stocks with low market-to-book (MTB) ratios have outperformed stocks with high MTB ratios. Rhodes-Kropf, Robinson, and Viswanathan (RKRV) (2005) separate the MTB ratio into a mispricing component and a growth options component. We investigate the...

In a large sample of U.S. takeovers, we find that acquisitions of targets with greater financial independence are associated with higher takeover premiums and lower acquirer announcement returns. This empirical result is most consistent with targets' deriving bargaining power from their...