Abstract

http://ssrn.com/abstract=1645964
 
 

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Real Estate Mergers: Corporate Control & Shareholder Wealth


Kiplan S. Womack


Pepperdine University, Graziadio School of Business & Management

May 29, 2010

Journal of Real Estate Finance and Economics, Forthcoming

Abstract:     
This study contributes new evidence to distinguish why mergers occur in the real estate industry by quantifying the combined firm return for nearly three decades of real estate mergers. As a measure of the overall change in shareholder wealth created by a merger, the combined firm return plays a key role in differentiating competing merger theories and is quantified for the real estate industry for the first time. Findings from this study are consistent with the notion that real estate mergers occur because firms with superior management acquire other firms that possess unexploited opportunities to cut costs and increase earnings (the inefficient management hypothesis). Furthermore, the results indicate that real estate mergers generally create wealth, as shareholders at best realize modest gains and at worst break even.

Number of Pages in PDF File: 38

Keywords: merger, acquisitions, Real Estate Investment Trusts, REITs

JEL Classification: G34, G14, L85

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Date posted: July 21, 2010  

Suggested Citation

Womack, Kiplan S., Real Estate Mergers: Corporate Control & Shareholder Wealth (May 29, 2010). Journal of Real Estate Finance and Economics, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1645964

Contact Information

Kiplan S. Womack (Contact Author)
Pepperdine University, Graziadio School of Business & Management ( email )
Department of Finance & Accounting
24255 Pacific Coast Highway
Malibu, CA 90263
United States
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