Does it Pay for Acquirers to Be Friendly?
John L. Glascock
University of Connecticut; European Business School
SUNY Institute of Technology
Corporate Ownership and Control, Vol. 5, No. 2, pp. 327-342
Friendly acquisitions have lower premiums and legal fees, entail less disruption of target activities and are typically less controversial than hostile acquisition, but the market does not seem to distinguish between friendly and hostile acquisitions in the short term. We study the long-term performance and risk metrics of acquirers and find that friendly acquisitions, in conjunction with other acquisition characteristics such as method of payment and mode of acquisition, tend to be risk increasing transactions and may also show a decrease in long-term post-acquisition abnormal performance.
Keywords: acquisition, cash flow, performance, risk
JEL Classification: G14, G34working papers series
Date posted: July 9, 2007 ; Last revised: May 31, 2009
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