Value Ambiguity and Gains from Acquisitions of Unlisted Targets
This 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.
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- Asquith, Paul, 1983. "Merger bids, uncertainty, and stockholder returns," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 51-83, April.
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- 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, vol. 24(4), pages 393-407, 05.
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