Does the Toehold Influence the Success of an M&A Transaction?
This study analyses whether the toehold (the target shares owned by the acquirer prior to launching a takeover bid) have a decisive role in the success of mergers and acquisition (M&A) transaction. It is well known that in any bidding process having a toehold is a significant competitive advantage over the rival bidders. This study is based on the takeover bids occurred on the Romanian capital market from 2000 to 2012. Our database includes both successful and unsuccessful transaction in terms of the change of control and companies operating in every industry. Other results suggest that the toehold can play an important role in a successful M&A transaction, but also that the toehold is influenced by other factors and by the industry of the acquired company.
Volume (Year): 4 (2014)
Issue (Month): 1 (January)
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- Victor DRAGOTA & Carmen LIPARA & Radu CIOBANU, 2013. "Agency Problems and Synergistic Effects in Romania: The Determinants of the Control Premium," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(2), pages 197-219, May.
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