Determinants and shareholder wealth effects of the sales method in acquisitions

Frederik Schlingemann; Haiyan Wu

doi:10.1016/j.jbankfin.2015.06.017

Determinants and shareholder wealth effects of the sales method in acquisitions

Frederik Schlingemann, Haiyan Wu

Research output: Contribution to journal › Article › Academic › peer-review

2 Citations (Scopus)

Abstract

We analyze the sales method for a sample of 575 acquisitions announced between 1998 and 2012 and find that targets choose auctions to maximize the target takeover premium through greater competition and to relax their financial constraints. Auctions, compared to negotiated deals, are associated with significantly higher target announcement returns, especially for relatively small targets. Bidder returns are positively related to auctions for bidders acquiring relatively small targets, not for the full sample. Taking into account size differences, we find that auctions, decrease target gains and increase bidder gains expressed in dollars.

Original language	English
Pages (from-to)	469-485
Number of pages	17
Journal	Journal of Banking and Finance
Volume	59
DOIs	https://doi.org/10.1016/j.jbankfin.2015.06.017
Publication status	Published - 2015

Research programs

RSM F&A

Access to Document

10.1016/j.jbankfin.2015.06.017

http://hdl.handle.net/1765/91452

Cite this

@article{ea138c07ea1d4b1696c494d2e23a7087,

title = "Determinants and shareholder wealth effects of the sales method in acquisitions",

abstract = "We analyze the sales method for a sample of 575 acquisitions announced between 1998 and 2012 and find that targets choose auctions to maximize the target takeover premium through greater competition and to relax their financial constraints. Auctions, compared to negotiated deals, are associated with significantly higher target announcement returns, especially for relatively small targets. Bidder returns are positively related to auctions for bidders acquiring relatively small targets, not for the full sample. Taking into account size differences, we find that auctions, decrease target gains and increase bidder gains expressed in dollars.",

author = "Frederik Schlingemann and Haiyan Wu",

year = "2015",

doi = "10.1016/j.jbankfin.2015.06.017",

language = "English",

volume = "59",

pages = "469--485",

journal = "Journal of Banking and Finance",

issn = "0378-4266",

publisher = "Elsevier",

}

TY - JOUR

T1 - Determinants and shareholder wealth effects of the sales method in acquisitions

AU - Schlingemann, Frederik

AU - Wu, Haiyan

PY - 2015

Y1 - 2015

N2 - We analyze the sales method for a sample of 575 acquisitions announced between 1998 and 2012 and find that targets choose auctions to maximize the target takeover premium through greater competition and to relax their financial constraints. Auctions, compared to negotiated deals, are associated with significantly higher target announcement returns, especially for relatively small targets. Bidder returns are positively related to auctions for bidders acquiring relatively small targets, not for the full sample. Taking into account size differences, we find that auctions, decrease target gains and increase bidder gains expressed in dollars.

AB - We analyze the sales method for a sample of 575 acquisitions announced between 1998 and 2012 and find that targets choose auctions to maximize the target takeover premium through greater competition and to relax their financial constraints. Auctions, compared to negotiated deals, are associated with significantly higher target announcement returns, especially for relatively small targets. Bidder returns are positively related to auctions for bidders acquiring relatively small targets, not for the full sample. Taking into account size differences, we find that auctions, decrease target gains and increase bidder gains expressed in dollars.

U2 - 10.1016/j.jbankfin.2015.06.017

DO - 10.1016/j.jbankfin.2015.06.017

M3 - Article

SN - 0378-4266

VL - 59

SP - 469

EP - 485

JO - Journal of Banking and Finance

JF - Journal of Banking and Finance

ER -

Determinants and shareholder wealth effects of the sales method in acquisitions

Abstract

Research programs

Access to Document

Fingerprint

Cite this