We investigate the takeover strategies of high default risk acquirers and their value impact. We find that these bidders select bigger, less profitable and unrelated targets, pursue transactions during recessions, and pay with shares by offering target shareholders high premiums. Their long-term...

A sizeable amount of empirical research attributes stock price crashes to agency reasons, predominantly on managerial bad news hoarding behaviour manifested through the financial reporting opacity channel. Admittedly, another prominent agency-based explanation, namely the overinvestment channel,...