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Deal size, bid prremium, and gains in bank mergers: The impact of managerial motivations

Author

Listed:
  • Atul Gupta

    (Bentley College)

  • Lalatendu Misra

    (University of Texas at San Antonio)

Abstract

Do relatively large members create more value? Do larger bid amounts represent wealth transfers or do they signal larger expected merger gains? We hypothesize that the relationship between aggregate merger gains, deal size, and bid premiums is asymmetric across mergers made by value-enhancing versus value-reducing managers. We use a large sample of bank mergers to test these predictions and find that the value response to different explanatory variables is asymmetric. Our findings provide new insights into how the market values merger bids.

Suggested Citation

  • Atul Gupta & Lalatendu Misra, 2007. "Deal size, bid prremium, and gains in bank mergers: The impact of managerial motivations," Working Papers 0018, College of Business, University of Texas at San Antonio.
  • Handle: RePEc:tsa:wpaper:0049fin
    as

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    File URL: http://interim.business.utsa.edu/wps/files/fin/0018FIN-092-2007.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Bank mergers; Managerial motivations; merger gains;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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