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Valuation of company merger from the shareholders' point of view
Toll, Christian; Hering, Thomas - In: Amfiteatru economic : an economic and business research … 19 (2017) 46, pp. 836-853
By means of a company merger formerly legally and economically independent companies are tied up to an economic entity. To order the financial state of affairs after the merger, the current shareholders must revalue their stake in the merged company. The interest is focused on the valuation of...
Persistent link: https://www.econbiz.de/10011791176
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Consistent valuation of project finance and LBO's using the flows-to-equity method
Cooper, Ian; Nyborg, Kjell G. - 2010
A common method of valuing the equity in highly leveraged transactions is the flows-to-equity method. When applying this method various formulas can be used to calculate the time-varying cost of equity. In this paper we show that some commonly used formulas are inconsistent with the assumptions...
Persistent link: https://www.econbiz.de/10008797682
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Mergers and Acquisitions : The Role of Ambiguity
Herron, Richard - 2020
Firms that face high ambiguity—Knightian uncertainty—reduce organic investments and increase the likelihood, count, and dollar value of merger and acquisition bids. Conversely, firms that face low ambiguity are likely targets. The probability and speed of deal completion increase in the...
Persistent link: https://www.econbiz.de/10012846707
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The Proper Purpose Rule and the Exercise of Directors’ Power in the Context of a Takeover Battle
You, Chuanman - 2018
and application of the Proper Purpose Rule (the Rule or the PPR) in the Context of a Takeover Battle. As codified in … decision is also significant in re-affirming the conventional approach of an English takeover regime towards restricted power … of a target board of directors when a company becomes the subject of a corporate raid, or a hostile takeover; an approach …
Persistent link: https://www.econbiz.de/10012928202
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Anti-Takeover Provisions and Investment Timing
Guthrie, Graeme - 2019
We show how directors can set the strength of a firm's anti-takeover provisions in order to influence the investment …-timing decision of a future empire-building CEO. The prospect of future hostile takeover attempts, which terminate the CEO's control … benefits if successful, affects the CEO's willingness to invest in low-value projects. If anti-takeover defenses are too strong …
Persistent link: https://www.econbiz.de/10012892376
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Acquiring Growth
Levine, Oliver - 2017
I develop a model of mergers in which M&A deals are used to reallocate investment opportunities. In equilibrium, acquirers lack internal growth options and seek out projects from targets in the M&A market. The model is able to reconcile many features of the merger data that I document, including...
Persistent link: https://www.econbiz.de/10012975766
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Consistent Valuation of Project Finance and LBO's Using the Flows-to-Equity Method
Cooper, Ian A. - 2017
The flows-to-equity method is often used to value highly leveraged projects, or transactions, where debt typically amortises over time according to a fixed schedule. This requires a formula that links the changing leverage over time with a time-varying equity discount rate. We show that the...
Persistent link: https://www.econbiz.de/10012976402
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Increase in Takeover Protection and Firm Knowledge Accumulation Strategy
Wang, Heli C. - 2015
We argue that the extent to which a firm faces takeover threats affects its knowledge structure. In particular …, takeover threats may lead to managers' reluctance to adopt a strategy toward firm-specific knowledge accumulation, because … implementing this strategy requires them to acquire specialized skills, which are at risk under takeover threats. Conversely …
Persistent link: https://www.econbiz.de/10013014724
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Market Learning About the Stand-Alone Value of the Acquirer
Buti, Krisztina - 2019
This paper presents new empirical evidence suggesting that the market evaluates acquisition announcements in the context of the firm's investment policy. When a firm with superior prior internal investment purchases another, market participants often learn from the acquisition, that internal...
Persistent link: https://www.econbiz.de/10012903745
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Limits to Arbitrage and Shareholder Gains in Corporate Acquisitions
Buti, Krisztina - 2019
The literature on corporate acquisitions reports a persistent empirical regularity: acquisition announcements by small bidders create greater shareholder value than those by large bidders. This paper presents evidence that greater shareholder gains to small bidders' announcements reflect...
Persistent link: https://www.econbiz.de/10012903980