The Timing and Method of Payment in Mergers when Acquirers Are Financially Constrained

• 成果类型: Article
• 署名作者: Gorbenko, Alexander S.; Malenko, Andrey
• 署名单位: Massachusetts Institute of Technology (MIT)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhx126
• 发表日期: 2018
• 页码: 3937
• 关键词: Signaling games; incentive compatibility; takeover bids; auctions; exchange; INVESTMENT; acquisitions; COMPETITION; securities; continuum

摘要

Although acquisitions are a popular form of investment, the link between firms' financial constraints and acquisition policies is not well understood. We develop a model in which financially constrained bidders approach targets, decide how much to bid and whether to bid in cash or in stock. In equilibrium, financial constraints do not affect the identity of the winning bidder, but they lower bidders' incentives to approach the target. Auctions are initiated by bidders with low constraints or high synergies. The use of cash is positively related to synergies and the acquirer's gains from the deal and negatively to financial constraints.