Merger Negotiations with Stock Market Feedback

• 成果类型: Article
• 署名作者: Betton, Sandra; Eckbo, B. Espen; Thompson, Rex; Thorburn, Karin S.
• 署名单位: Concordia University - Canada; Dartmouth College; Southern Methodist University; Norwegian School of Economics (NHH)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12151
• 发表日期: 2014
• 页码: 1705-1745
• 关键词: prices

摘要

Do preoffer target stock price runups increase bidder takeover costs? We present model-based tests of this issue assuming runups are caused by signals that inform investors about potential takeover synergies. Rational deal anticipation implies a relation between target runups and markups (offer value minus runup) that is greater than minus one-for-one and inherently nonlinear. If merger negotiations force bidders to raise the offer with the runup-a costly feedback loop where bidders pay twice for anticipated target synergies-markups become strictly increasing in runups. Large-sample tests support rational deal anticipation in runups while rejecting the costly feedback loop.