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File name: SSRN-id2174910. ; Size: 319K
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Deal Size, Acquisition Premia and Shareholder Gains
George Alexandridis
ICMA Centre, Henley Business School
Kathleen P. Fuller
University of Mississippi - School of Business Administration
Lars Terhaar
ICMA Centre, Henley Business School
Nickolaos G. Travlos
ALBA Graduate Business School
September 30, 2012
Journal of Corporate Finance (Forthcoming)
Abstract:
This study examines the contradictory predictions regarding the association between the premium paid in acquisitions and deal size. We document a robust negative relation between offer premia and target size, indicating that acquirers tend to pay less for large firms, not more. We also find that the overpayment potential is lower in acquisitions of large targets. Yet, they still destroy more value for acquirers around deal announcements, implying that target size may proxy, among others, for the unobserved complexity inherent in large deals. We provide evidence in favor of this interpretation.
Number of Pages in PDF File: 36
Keywords: Public Acquisitions, Target Size, Premium, Acquirer Returns
JEL Classification: G14, G30, G34
Accepted Paper Series
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Date posted: March 11, 2011
; Last revised: November 13, 2012
Suggested CitationAlexandridis, George, Fuller, Kathleen P., Terhaar, Lars and Travlos, Nickolaos G., Deal Size, Acquisition Premia and Shareholder Gains (September 30, 2012). Journal of Corporate Finance (Forthcoming). Available at SSRN: http://ssrn.com/abstract=1782930 or http://dx.doi.org/10.2139/ssrn.1782930
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