Dual ownership, returns, and voting in mergers

• 成果类型: Article
• 署名作者: Bodnaruk, Andriy; Rossi, Marco
• 署名单位: University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital; Texas A&M University System; Texas A&M University College Station; Mays Business School
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2016.01.021
• 发表日期: 2016
• 页码: 58-80
• 关键词: Dual holders; SHAREHOLDERS; BONDHOLDERS; M&As; financial conglomerates

摘要

In Mergers and Acquisitions (M&As) a significant proportion of targets' equity is owned by financial institutions that simultaneously own targets' bonds (dual holders). Targets with larger equity ownership by dual holders have lower M&A equity premia and larger abnormal bond returns, particularly when dual holders stand to benefit more from appreciation of their bond stakes, e.g., when their bond ownership in the target is large and the target credit rating is non-investment grade. Dual holders are more likely to vote in favor of the merger proposal. Our results suggest the presence of coordination of decisions within dual holding financial conglomerates in M&A targets. (C) 2016 Elsevier B.V. All rights reserved.