Abstract

http://ssrn.com/abstract=1516096
 
 

References (29)



 
 

Citations (1)



 


 



Who Gains from Buying Bad Bidders?


David Offenberg


Loyola Marymount University - Department of Finance

Miroslava Straska


Virginia Commonwealth University (VCU) - School of Business

H. Gregory Waller


Virginia Commonwealth University School of Business

August 24, 2012

Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

Abstract:     
We study the value gains from takeovers of firms with poor acquisition histories. We document that the premium received by target shareholders is higher when the value loss from the targets’ prior acquisitions is larger. However, the gains to target shareholders seem to be offset by losses to acquiring shareholders. The average announcement return to acquiring shareholders is negative and decreasing in the value loss from the targets’ prior acquisitions. Additionally, the combined acquirer-target value created in these takeovers is insignificant. These results suggest that the value lost from targets’ prior acquisitions is not recovered through changes in corporate control.

Number of Pages in PDF File: 59

Keywords: mergers and acquisitions, market for corporate control, agency theory, corporate governance, shareholder wealth

JEL Classification: G00, G3, G30, G34, L00, L2, L20

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Date posted: December 2, 2009 ; Last revised: September 30, 2012

Suggested Citation

Offenberg, David and Straska, Miroslava and Waller, H. Gregory, Who Gains from Buying Bad Bidders? (August 24, 2012). Journal of Financial and Quantitative Analysis (JFQA), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1516096 or http://dx.doi.org/10.2139/ssrn.1516096

Contact Information

David Offenberg (Contact Author)
Loyola Marymount University - Department of Finance ( email )
Los Angeles, CA 90045
United States
Miroslava Straska
Virginia Commonwealth University (VCU) - School of Business ( email )
Richmond, VA 23284-4000
United States
H. Gregory Waller
Virginia Commonwealth University School of Business ( email )
Richmond, VA 23226
United States
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