Glamour, value and the post-acquisition performance of acquiring firms

• 成果类型: Article
• 署名作者: Rau, PR; Vermaelen, T
• 署名单位: Purdue University System; Purdue University; INSEAD Business School; Maastricht University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(98)00023-3
• 发表日期: 1998
• 页码: 223-253
• 关键词: mergers; post-acquisition performance; long-horizon event studies; bootstrapping

摘要

This paper uses a methodology robust to recent criticisms of standard long-horizon event study tests to show that bidders in mergers underperform while bidders in tender offers overperform in the three years after the acquisition. However, the long-term underperformance of acquiring firms in mergers is predominantly caused by the poor post-acquisition performance of low book-to-market glamour firms. We interpret this finding as evidence that both the market and the management overextrapolate the bidder's past performance (as reflected in the bidder's book-to-market ratio) when they assess the desirability of an acquisition. (C) 1998 Elsevier Science S.A. All rights reserved.