Corporate cash reserves and acquisitions

• 成果类型: Article
• 署名作者: Harford, J
• 署名单位: University of Oregon
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/0022-1082.00179
• 发表日期: 1999
• 页码: 1969-1997
• 关键词: EMPIRICAL-ANALYSIS; TAKEOVER TARGETS; BIDDING FIRMS; stock returns; AGENCY COSTS; TOBINS-Q; performance; MARKET; OWNERSHIP; gains

摘要

Cash-rich firms are more likely than other firms to attempt acquisitions. Stock return evidence shows that acquisitions by cash-rich firms are value decreasing. Cash-rich bidders destroy seven cents in value for every excess dollar of cash reserves held. Cash-rich firms are more likely to make diversifying acquisitions and their targets are less likely to attract other bidders. Consistent with the stock return evidence, mergers in which the bidder is cash-rich are followed by abnormal declines in operating performance. Overall, the evidence supports the agency costs of free cash flow explanation for acquisitions by cash-rich firms.