Abstract

http://ssrn.com/abstract=313620
 
 

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What Do Returns to Acquiring Firms Tell Us? Evidence from Firms that Make Many Acquisitions


Kathleen P. Fuller


University of Mississippi - School of Business Administration

Jeffry M. Netter


University of Georgia - Department of Banking and Finance; University of Georgia Law School

Mike Stegemoller


Baylor University


Journal of Finance, Vol. 57, No. 4, August 2002

Abstract:     
We study shareholder returns for firms that acquired five or more public, private, and/or subsidiary targets within a short time period. Since the same bidder chooses different types of targets and methods of payment, any variation in returns must be due to the characteristics of the target and the bid. Results indicate bidder shareholders gain when buying a private firm or subsidiary but lose when purchasing a public firm. Further, the return is greater the larger the target and if the bidder offers stock. These results are consistent with a liquidity discount, and tax and control effects in this market.

Keywords: merger, acquisition, private firms, public firms, liquidity discount

JEL Classification: G34

Accepted Paper Series





Not Available For Download

Date posted: August 5, 2002  

Suggested Citation

Fuller, Kathleen P. and Netter, Jeffry M. and Stegemoller, Mike, What Do Returns to Acquiring Firms Tell Us? Evidence from Firms that Make Many Acquisitions. Journal of Finance, Vol. 57, No. 4, August 2002. Available at SSRN: http://ssrn.com/abstract=313620

Contact Information

Kathleen Petrie Fuller
University of Mississippi - School of Business Administration ( email )
PO Box 3986
Oxford, MS 38677
United States
Jeffry M. Netter (Contact Author)
University of Georgia - Department of Banking and Finance ( email )
Terry College of Business
Athens, GA 30602-6253
United States
706-542-3654 (Phone)
HOME PAGE: http://www.terry.uga.edu/finance/facultyprofiles/n
University of Georgia Law School
Athens, GA 30602
United States
Michael A. Stegemoller
Baylor University ( email )
P.O. Box 98004
Waco, TX 76798-8004
United States
254-710-4145 (Phone)
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