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Two-step acquisitions and liquidity spread

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  • Mufaddal Baxamusa
  • Dobrina Georgieva

Abstract

We hypothesize that macro-level liquidity affects the choice between tender-mergers and mergers. We employ a novel methodology to test this relationship. This method finds structural breaks in the number of tender-mergers relative to mergers and finds that the structural breaks coincide strikingly well with major changes in macro-level liquidity. Consistent with our hypotheses our regression analysis finds that the number of tender offers increases with liquidity and also that the acquirer’s share of synergy increases as tender-mergers increase. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Mufaddal Baxamusa & Dobrina Georgieva, 2015. "Two-step acquisitions and liquidity spread," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(2), pages 262-287, April.
    • Handle: RePEc:spr:jecfin:v:39:y:2015:i:2:p:262-287
    DOI: 10.1007/s12197-012-9247-6
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    More about this item

    Keywords

    Tender-merger; Mergers and acquisitions; Liquidity; Bargaining power; Synergy; G34; G18;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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