The effect of reference point prices on mergers and acquisitions

• 成果类型: Article
• 署名作者: Baker, Malcolm; Pan, Xin; Wurgler, Jeffrey
• 署名单位: National Bureau of Economic Research; Harvard University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2012.04.010
• 发表日期: 2012
• 页码: 49-71
• 关键词: mergers; acquisitions; Offer price; Reference point; Behavioral corporate finance

摘要

Prior stock price peaks of targets affect several aspects of merger and acquisition activity. Offer prices are biased toward recent peak prices although they are economically unremarkable. An offer's probability of acceptance jumps discontinuously when it exceeds a peak price. Conversely, bidder shareholders react more negatively as the offer price is influenced upward toward a peak. Merger waves occur when high returns on the market and likely targets make it easier for bidders to offer a peak price. Parties thus appear to use recent peaks as reference points or anchors to simplify the complex tasks of valuation and negotiation. (c) 2012 Elsevier B.V. All rights reserved.