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Does Asymmetric Information Affect the Premium in Mergers and Acquisitions?

Dionne, Georges - 2014

TWe test the influence of information asymmetry on the premium paid for an acquisition. We analyze mergers and acquisitions as English auctions. The theory of dynamic auctions with private and common value predicts that more informed bidders may pay a lower price. We test that prediction with a...

Persistent link: https://www.econbiz.de/10013070221

Investor Cost Basis and Takeover Bids

Caskey, Judson - 2012

This study examines how institutional investors' cost bases impact takeover offer prices and the likelihood of deal …

Persistent link: https://www.econbiz.de/10013107923

Preemptive bidding, target resistance, and takeover premiums

Dimopoulos, Theodosios; Sacchetto, Stefano - 2011

This paper empirically evaluates two possible sources of large takeover premiums: preemptive bidding and target … resistance. We develop an auction model that features costly sequential entry of bidders in takeover contests and that … in the period 1988-2006. We find that target resistance is the main determinant of takeover premiums in 74% of successful …

Persistent link: https://www.econbiz.de/10009375142

Signaling Equilibria in Takeovers with Risk-averse Bidders

Carrasco, Diego; Hernandez-Chanto, Allan - 2023

We analyze takeover operations in which (i) bidding firms are risk-averse; (ii) offers can be made using cash or equity … acquirer initiates the takeover, and competitive operations, in which the target organizes an informal auction across potential …

Persistent link: https://www.econbiz.de/10014258241

Information, Competition, and Auction versus Negotiated Merger

Hoang, Ngoc Giang - 2013

Intuition suggests that an auction maximizes revenue for the seller; yet empirically, many companies sell their businesses in a negotiation with one buyer. I argue that, when potential buyers are market competitors, an auction may generate lower revenue for the seller. First, in an auction,...

Persistent link: https://www.econbiz.de/10014151426

The deterring role of the medium of payment in takeover contests :. theory and evidence from the U.K.

Cornu, Philippe - 1998

Persistent link: https://www.econbiz.de/10001426489

Misvaluation and financial constraints : method of payment and buyer identity in mergers & acquisitions

Berg, Aron - 2017

The paper studies how stock price misvaluation and financial frictions affect whether an acquisition occurs between or within industries and whether the acquirer pays in cash or stocks. I set up a model where stock market misvaluation correlates within industries and across industries and assume...

Persistent link: https://www.econbiz.de/10011621231

Dissecting Bidder Security Returns on Payment Methods

Li, Lily - 2018

The choice of payment methods in M&A deals can affect bidder stock and bond value through two channels simultaneously: signaling and wealth transfer. We propose a method to disentangle these two effects by combining observed bidder stock and bond abnormal returns around deal announcements. Our...

Persistent link: https://www.econbiz.de/10012908436

Mergers and Acquisitions Valuation : Cash vs Stock Payment

Feito-Ruiz, Isabel - 2013

The aim of this paper is to study the influence of the Merger and Acquisition (M&A) payment method decision on the acquiring shareholders' M&A valuation, considering the relevance of the acquiring ownership structure and the legal and institutional environment, and the possibility that the...

Persistent link: https://www.econbiz.de/10013079367

Mergers Among Asymmetric Bidders : A Logit Second-Price Auction Model

Froeb, Luke M.; Tschantz, Steven; Crooke, Philip - 2012

In this paper, we derive estimators of, and closed-form (non-integral) expressions for, the distribution of bids in an extreme value, asymmetric, second-price, private-values auction. In equilibrium, prices (winning bids) and shares (winning probabilities) have a simple monotonic...

Persistent link: https://www.econbiz.de/10014028159