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Appraisal rights and corporate disclosure during mergers and acquisitions

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  • Stewart, Christopher R.

Abstract

Target shareholders have the right to ask for a higher merger price if good news emerges after a merger agreement. This “appraisal right” varies with state law and was substantially strengthened in Delaware in 2007. I examine how target managers respond to changes in this right. If target managers represent target shareholders, the managers would be more likely to release good news, but I find they are more likely to withhold good news when appraisal rights are higher. This suggests agency problems and collusion on the part of target managers, and thus my paper adds to the larger literature that considers agency problems on the part of managers.

Suggested Citation

  • Stewart, Christopher R., 2023. "Appraisal rights and corporate disclosure during mergers and acquisitions," Journal of Accounting and Economics, Elsevier, vol. 75(1).
    • Handle: RePEc:eee:jaecon:v:75:y:2023:i:1:s0165410122000507
    DOI: 10.1016/j.jacceco.2022.101527
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    References listed on IDEAS

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    More about this item

    Keywords

    Appraisal laws; Shareholder rights; Mergers and acquisitions; Corporate disclosure;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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