Abstract

http://ssrn.com/abstract=1785715
 
 

References (23)



 


 



Bond Tender Offers in Mergers and Acquisitions


Matthew T. Billett


Indiana University - Kelley School of Business - Department of Finance

Ke Yang


Lehigh University

August 13, 2014

AFA 2012 Chicago Meetings Paper

Abstract:     
We explore the motives and consequences of bond tender offers announced in connection with mergers and acquisitions (M&A). We find merging firms use bond tender offers strategically to renegotiate with bondholders, reduce leverage, eliminate covenants, and curtail the co-insurance benefits associated with acquisitions. The decision to make a tender offer for one bond issue influences the wealth effects of other issues. Bondholder wealth effects depend not only the bonds characteristics, but also on the characteristics of sibling bonds. Finally, the use of bond tender offers in M&A is associated with increased likelihood of deal consummation and lower acquisition premium.

Number of Pages in PDF File: 32

Keywords: Mergers; Acquisitions; Bond tender offers; Co-insurance; Covenant

JEL Classification: G34, G32

working papers series





Download This Paper

Date posted: March 15, 2011 ; Last revised: August 14, 2014

Suggested Citation

Billett, Matthew T. and Yang, Ke, Bond Tender Offers in Mergers and Acquisitions (August 13, 2014). AFA 2012 Chicago Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1785715 or http://dx.doi.org/10.2139/ssrn.1785715

Contact Information

Matthew T. Billett (Contact Author)
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3366 (Phone)

Ke Yang
Lehigh University ( email )
621 Taylor Street
Bethlehem, PA 18015
United States
6107583684 (Phone)
6107586429 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 907
Downloads: 157
Download Rank: 111,659
References:  23

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.328 seconds