Which Acquirers Gain More, Single or Multiple? Recent Evidence from the USA Market

13 Pages Posted: 4 Jul 2008

See all articles by Ahmad Ismail

Ahmad Ismail

American University of Beirut


This study considers shareholder returns using 16,221 US takeovers between 1985 and 2004. It finds that single acquirers outperform multiple acquirers by 1.66%, and that the gap widens to 5% in equity exchange offers. In contrast to multiple acquirers, single acquirers generate higher returns in equity deals than in cash and mixed offers, due to the high returns earned through the acquisition of non-public targets. Unsuccessful first time acquirers learn but successful first time bidders suffer from hubris behavior in subsequent acquisitions. The study finds that size, relative size, and valuation differences could explain the higher returns for single acquirers, and that the toehold presence leads to paying lower premiums.

Keywords: Takeovers, Multiple, Relative size, Valuation

JEL Classification: G34

Suggested Citation

Ismail, Ahmad, Which Acquirers Gain More, Single or Multiple? Recent Evidence from the USA Market. Global Finance Journal, Vol. 19, 2008, Available at SSRN: https://ssrn.com/abstract=1154537

Ahmad Ismail (Contact Author)

American University of Beirut ( email )

Bliss Street
Olayan School of Business
Beirut, POB 11236

HOME PAGE: http://www.aub.edu.lb/osb/publicprofile/Pages/profile.aspx?memberID=ai05

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