Bid anticipation, information revelation, and merger gains

• 成果类型: Article
• 署名作者: Wang, Wenyu
• 署名单位: Indiana University System; Indiana University Bloomington
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.02.010
• 发表日期: 2018
• 页码: 320-343
• 关键词: Mergers and acquisitions; revelation; anticipation; Merger gains

摘要

Because firms' takeover motives are unobservable to investors, mergers are only partially anticipated and often appear as mixed blessings for acquirers. I construct and estimate a model to study the causes and consequences of bid anticipation and information revelation in mergers. Controlling for the market's reassessment of the acquirer's stand-alone value, I estimate that acquirers gain 4% from a typical merger. The total value of an active merger market averages 13% for acquirers, part of which is capitalized in their pre-merger market values. My model also explains the correlation between announcement returns and firm characteristics, as well as the low predictability of mergers. (C) 2018 Elsevier B.V. All rights reserved.