What Do Returns to Acquiring Firms Tell Us? Evidence from Firms That Make Many Acquisitions
Top Cited Papers
- 1 August 2002
- journal article
- research article
- Published by Wiley in The Journal of Finance
- Vol. 57 (4) , 1763-1793
- https://doi.org/10.1111/1540-6261.00477
Abstract
We study shareholder returns for firms that acquired five or more public, private, and/or subsidiary targets within a short time period. Since the same bidder chooses different types of targets and methods of payment, any variation in returns must be due to the characteristics of the target and the bid. Results indicate bidder shareholders gain when buying a private firm or subsidiary but lose when purchasing a public firm. Further, the return is greater the larger the target and if the bidder offers stock. These results are consistent with a liquidity discount, and tax and control effects in this market.Keywords
This publication has 25 references indexed in Scilit:
- New Evidence and Perspectives on MergersJournal of Economic Perspectives, 2001
- Takeovers of Privately Held Targets, Methods of Payment, and Bidder ReturnsThe Journal of Finance, 1998
- The Mode of Acquisition in Takeovers: Taxes and Asymmetric InformationThe Journal of Finance, 1991
- Asymmetric Information and the Medium of Exchange in Takeovers: Theory and TestsThe Review of Financial Studies, 1990
- Consistent Estimation of Cross-Sectional Models in Event StudiesThe Review of Financial Studies, 1990
- Competition and the Medium of Exchange in TakeoversThe Review of Financial Studies, 1990
- Synergistic gains from corporate acquisitions and their division between the stockholders of target and acquiring firmsJournal of Financial Economics, 1988
- Using daily stock returnsJournal of Financial Economics, 1985
- The gains to bidding firms from mergerJournal of Financial Economics, 1983
- Measuring security price performanceJournal of Financial Economics, 1980