Abstract

http://ssrn.com/abstract=958807
 


 



When Target CEOs Contract with Acquirers: Evidence from Bank Mergers and Acquisitions


Elijah Brewer III


DePaul University - Department of Finance; Federal Reserve Bank of Chicago

William E. Jackson III


Culverhouse College of Commerce, University of Alabama; Federal Reserve Bank of Atlanta

Larry D. Wall


Federal Reserve Bank of Atlanta - Research Department

December 2006

FRB of Atlanta Working Paper No. 2006-28

Abstract:     
This paper investigates the impact of the target chief executive officer's (CEO) postmerger position on the purchase premium and target shareholders' abnormal returns around the announcement of the deal in a sample of bank mergers during the period 1990-2004. We find evidence that the target shareholders' returns are negatively related to the postmerger position of their CEO. However, these lower returns are not matched by higher returns to the acquirer's shareholders, suggesting little or no wealth transfers. Additionally, our evidence suggests that the target CEO becoming a senior officer of the combined firm does not boost the overall value of the merger transaction.

Number of Pages in PDF File: 39

Keywords: merger, acquisition, target CEO, corporate governance

JEL Classification: G34, K22, J33

working papers series





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Date posted: February 9, 2007  

Suggested Citation

Brewer, Elijah and Jackson, William E. and Wall, Larry D., When Target CEOs Contract with Acquirers: Evidence from Bank Mergers and Acquisitions (December 2006). FRB of Atlanta Working Paper No. 2006-28. Available at SSRN: http://ssrn.com/abstract=958807 or http://dx.doi.org/10.2139/ssrn.958807

Contact Information

Elijah Brewer III
DePaul University - Department of Finance ( email )
1 East Jackson Blvd.
Chicago, IL 60604-2287
United States
Federal Reserve Bank of Chicago ( email )
230 South LaSalle Street
Chicago, IL 60604
United States
William E. Jackson III
Culverhouse College of Commerce, University of Alabama ( email )
Culverhouse College of Commerce
Tuscaloosa, AL 35487-0225
United States
205.348.6217 (Phone)
205.348.6695 (Fax)
Federal Reserve Bank of Atlanta ( email )
1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
Larry D. Wall (Contact Author)
Federal Reserve Bank of Atlanta - Research Department ( email )
1000 Peachtree Street, NE
Atlanta, GA 30309-4470
United States
404-498-8937 (Phone)
404-498-8956 (Fax)
HOME PAGE: http://www.frbatlanta.org/econ_rd/bios/wall.htm
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