Bondholder wealth effects in mergers and acquisitions: New evidence from the 1980s and 1990s

• 成果类型: Article
• 署名作者: Billett, MT; King, THD; Mauer, DC
• 署名单位: University of Iowa; Southern Methodist University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2004.00628.x
• 发表日期: 2004
• 页码: 107-135
• 关键词: CORPORATE-MERGERS; tender offers; FIRMS; MARKET; bonds; debt

摘要

We examine the wealth effects of mergers and acquisitions on target and acquiring firm bondholders in the 1980s and 1990s. Consistent with a coinsurance effect, below investment grade target bonds earn significantly positive announcement period returns. By contrast, acquiring firm bonds earn negative announcement period returns. Additionally, target bonds have significantly larger returns when the target's rating is below the acquirer's, when the combination is anticipated to decrease target risk or leverage, and when the target's maturity is shorter than the acquirer's. Finally, we find that target and acquirer announcement period bond returns are significantly larger in the 1990s.