Abstract

http://ssrn.com/abstract=338871
 
 

References (27)



 
 

Citations (53)



 


 



What is the Price of Hubris? Using Takeover Battles to Infer Overpayments and Synergies


Pekka Hietala


INSEAD - Finance

Steven N. Kaplan


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

David T. Robinson


Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER)

October 2002

NBER Working Paper No. w9264

Abstract:     
We present a framework for determining the information that can be extracted from stock prices around takeover contests. In only two types of cases is it theoretically possible to use stock price movements to infer bidder overpayment and relative synergies. The takeover contest for Paramount in 1994 illustrates one of these generic cases. We estimate that Viacom, the winning' bidder, overpaid for Paramount by more than $2 billion. This occurred despite the fact that Viacom's CEO owned roughly 3/4 of Viacom. These results are consistent with managerial overconfidence and/or large private benefits, but not with the traditional agency-based incentive problem.

Number of Pages in PDF File: 44

working papers series


Download This Paper

Date posted: October 11, 2002  

Suggested Citation

Hietala, Pekka and Kaplan, Steven N. and Robinson, David T., What is the Price of Hubris? Using Takeover Battles to Infer Overpayments and Synergies (October 2002). NBER Working Paper No. w9264. Available at SSRN: http://ssrn.com/abstract=338871

Contact Information

Pekka Hietala
INSEAD - Finance ( email )
Boulevard de Constance
F-77305 Fontainebleau Cedex
France
+33 1 6072 4178 (Phone)
+33 1 6072 4045 (Fax)
HOME PAGE: http://www.insead.fr/facultyresearch/finance/hietala/
Steven Neil Kaplan (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-4513 (Phone)
773-702-0458 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
David T. Robinson
Duke University - Fuqua School of Business ( email )
Box 90120
Durham, NC 27708-0120
United States
919-660-8023 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,659
Downloads: 38
References:  27
Citations:  53
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.313 seconds