Acquisitions driven by stock overvaluation: Are they good deals?

• 成果类型: Article
• 署名作者: Fu, Fangjian; Lin, Leming; Officer, Micah S.
• 署名单位: Singapore Management University; State University System of Florida; University of Florida; Loyola Marymount University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2013.02.013
• 发表日期: 2013
• 页码: 24-39
• 关键词: Mergers and acquisitions; Stock overvaluation; operating performance; AGENCY COSTS; ceo compensation

摘要

Theory and recent evidence suggest that overvalued firms can create value for shareholders if they exploit their overvaluation by using their stock as currency to purchase less overvalued firms. We challenge this idea and show that, in practice, overvalued acquirers significantly overpay for their targets. These acquisitions do not, in turn, lead to synergy gains. Moreover, these acquisitions seem to be concentrated among acquirers with the largest governance problems. CEO compensation, not shareholder value creation, appears to be the main motive behind acquisitions by overvalued acquirers. (C) 2013 Elsevier B.V. All rights reserved.