Abstract

http://ssrn.com/abstract=453284
 
 

References (32)



 
 

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


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


Financial Management, Vol. 32, No. 3, 2003

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. Even in these two cases, we argue that it is practically difficult to extract this information. We illustrate one of these generic cases using the takeover contest for Paramount in 1994 in which Viacom overpaid by more than $2 billion. Our findings 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: 28

Accepted Paper Series


Date posted: January 10, 2005  

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. Financial Management, Vol. 32, No. 3, 2003. Available at SSRN: http://ssrn.com/abstract=453284

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
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 (Contact Author)
Fuqua School of Business, Duke University ( email )
100 Fuqua Drive
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: 1,692
Downloads: 20
References:  32
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 0.344 seconds