Value Ambiguity and Gains from Acquisitions of Unlisted Targets
AbstractThis paper examines the announcement period and the post acquisition gains of UK acquirers of unlisted targets that are subject to value-ambiguity. The evidence shows that target’s age, size, intangibility of assets, and investments can explain the variations in bidding firm’s abnormal returns both in the short- and in the long-run. The findings further show that the gains to bidding firms acquiring unlisted targets are associated with the difficulty in valuing unlisted targets and the means of payment used.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for Research into Industry, Enterprise, Finance and the Firm in its series CRIEFF Discussion Papers with number 0810.
Date of creation: Oct 2008
Date of revision:
Contact details of provider:
Postal: School of Economics and Finance, University of St. Andrews, Fife KY16 9AL
Phone: 01334 462420
Fax: 01334 462438
Web page: http://crieff.wordpress.com/
More information through EDIRC
mergers and acquisitions; abnormal returns; value-ambiguity; unlisted firms; method of payment.;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-21 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Draper & Krishna Paudyal, 2006. "Acquisitions: Private versus Public," European Financial Management, European Financial Management Association, European Financial Management Association, vol. 12(1), pages 57-80.
- Kathleen Fuller & Jeffry Netter & Mike Stegemoller, 2002. "What Do Returns to Acquiring Firms Tell Us? Evidence from Firms That Make Many Acquisitions," Journal of Finance, American Finance Association, American Finance Association, vol. 57(4), pages 1763-1793, 08.
- Asquith, Paul, 1983. "Merger bids, uncertainty, and stockholder returns," Journal of Financial Economics, Elsevier, Elsevier, vol. 11(1-4), pages 51-83, April.
- Saeyoung Chang, 1998. "Takeovers of Privately Held Targets, Methods of Payment, and Bidder Returns," Journal of Finance, American Finance Association, American Finance Association, vol. 53(2), pages 773-784, 04.
- Mara Faccio & Ronald W. Masulis, 2005. "The Choice of Payment Method in European Mergers and Acquisitions," Journal of Finance, American Finance Association, American Finance Association, vol. 60(3), pages 1345-1388, 06.
- Jung-Chin Shen & Jeffrey Reuer, 2005. "Adverse Selection in Acquisitions of Small Manufacturing Firms: A Comparison of Private and Public Targets," Small Business Economics, Springer, Springer, vol. 24(4), pages 393-407, 05.
- Paul Draper & Krishna Paudyal, 2008. "Information Asymmetry and Bidders' Gains," Journal of Business Finance & Accounting, Wiley Blackwell, Wiley Blackwell, vol. 35(3-4), pages 376-405.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bram Boskamp).
If references are entirely missing, you can add them using this form.