Merger Process and Shareholder Wealth: Evidence from Public Tender Offer in Korea

25 Pages Posted: 25 Aug 2011

See all articles by Yonghyun Kwon

Yonghyun Kwon

Korea Advanced Institute of Science and Technology (KAIST) - Department of Management Science

Minji Song

Korea Advanced Institute of Science and Technology (KAIST) - Department of Management Science

Date Written: August 25, 2011

Abstract

This paper examines announcement effect of public tender offer process in Korea. We find that firms are more affected by selection of the preferred negotiator date than LOI submission date. Specifically only the firms exempted from preferred negotiator show significantly negative effect, and the financial crisis has significantly greater negative effect on those firms. Also the result shows that lower insider and largest ownership increase the probability of giving up the deal of non-chaebol affiliated firms. Overall we find that selection of the preferred negotiator has significant meaning, and ownership structure affects a firm’s intermediate merger process.

Keywords: M&A process, Financial Crisis, Ownership Structure

JEL Classification: G32, G34

Suggested Citation

Kwon, Yonghyun and Song, Minji, Merger Process and Shareholder Wealth: Evidence from Public Tender Offer in Korea (August 25, 2011). 24th Australasian Finance and Banking Conference 2011 Paper. Available at SSRN: https://ssrn.com/abstract=1916559 or http://dx.doi.org/10.2139/ssrn.1916559

Yonghyun Kwon (Contact Author)

Korea Advanced Institute of Science and Technology (KAIST) - Department of Management Science ( email )

291 Daehak-ro(373-1 Guseong-dong), Yuseong-gu
Daejeon, 305-701
Korea, Republic of (South Korea)

Minji Song

Korea Advanced Institute of Science and Technology (KAIST) - Department of Management Science ( email )

291 Daehak-ro(373-1 Guseong-dong), Yuseong-gu
Daejeon, 305-701
Korea, Republic of (South Korea)

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