Abstract

http://ssrn.com/abstract=1785715
 
 

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Wealth Transfers Among and Between Bond Issues in Mergers and Acquisitions: Evidence from Bond Tender Offers


Matthew T. Billett


Indiana University - Kelley School of Business - Department of Finance

Ke Yang


Lehigh University

May 2011

AFA 2012 Chicago Meetings Paper

Abstract:     
We explore bondholder wealth effects of mergers and acquisitions (M&A) at the bond issue level where a tender offer is made for one or more of the target or acquiring firms’ bond issues. We document 28 instances in the 1985-1995 period and 223 from 1996-2008. This rise in M&A related bond tender offer activity coincides with the increased use of change in control covenants and the timing of significant bondholder wealth effects documented in prior studies. We find tender offers influence not only the associated bond’s wealth, but also the wealth of shareholders and sibling bond issues that remain outstanding.

Number of Pages in PDF File: 39

Keywords: Mergers, acquisitions, tender offer, wealth transfers

JEL Classification: G34, G32

working papers series


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Date posted: March 15, 2011 ; Last revised: May 12, 2014

Suggested Citation

Billett, Matthew T. and Yang, Ke, Wealth Transfers Among and Between Bond Issues in Mergers and Acquisitions: Evidence from Bond Tender Offers (May 2011). 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)
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