dc.contributor.author | Eckbo, B. Espen | |
dc.contributor.author | Makaew, Tanakorn | |
dc.contributor.author | Thorburn, Karin S. | |
dc.date.accessioned | 2013-12-05T08:17:09Z | |
dc.date.available | 2013-12-05T08:17:09Z | |
dc.date.issued | 2013 | |
dc.identifier.uri | http://hdl.handle.net/11250/170383 | |
dc.description.abstract | We find that the probability of all-stock financed takeovers increases with measures of bidder
overvaluation. However, when we instrument the bidder's pricing error using aggregate mutual
fund flows, the reverse happens: greater overvaluation reduces the all-stock financing propensity.
Since shocks to aggregate fund flows are exogenous to the payment method choice - while directly impacting bidder pricing errors - this evidence strongly rejects the notion that all-stock financed takeovers are "market driven". Bidders paying with stock tend to be small, non-dividend paying growth companies with low leverage, that recently made a seasoned equity offering. We also show that all-stock financing is more likely in high-tech industries, when the target and bidder
operate in highly complementary industries are geographically close - factors that suggest the
target is relatively informed about true bidder value. Overall, the evidence does not suggest a
particular role for market mispricing in driving all-stock financed takeovers. | no_NO |
dc.language.iso | eng | no_NO |
dc.publisher | Norwegian School of Economics. Department of Finance | no_NO |
dc.relation.ispartofseries | Working paper;2013:4 | |
dc.title | Are stock-financed takeovers opportunistic? | no_NO |
dc.type | Working paper | no_NO |
dc.subject.nsi | VDP::Social science: 200::Economics: 210::Economics: 212 | no_NO |