M&A Outcomes and Willingness to Sell

47 Pages Posted: 17 Nov 2011 Last revised: 14 Oct 2012

See all articles by Eric de Bodt

Eric de Bodt

NHH-Caltech

Jean-Gabriel Cousin

Univ. Lille, ULR 4112 - LSMRC

Irina Demidova

École des sciences de la gestion - Université du Québec à Montréal

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Date Written: October 12, 2012

Abstract

Is it in target shareholders’ best interest to divulgate their willingness to sell (WTS)? In this article, we tackle this issue by investigating the net WTS wealth effect. We first model the trade-off between the probability of a sale and the price paid in case of a sale, and derive testable predictions. We then provide an empirical test using a proxy of the target WTS based on deal initiation and the chosen selling procedure, which are hand-collected in the Securities and Exchange Commission filings. Our results reveal, among others, a negative relation between the displayed WTS and target’s expected profits, mitigated by competition among acquirers.

Keywords: Willingness to sell, Mergers and Acquisitions, Bid Premium, Deal Completion

JEL Classification: G34

Suggested Citation

de Bodt, Eric and Cousin, Jean-Gabriel and Demidova, Irina, M&A Outcomes and Willingness to Sell (October 12, 2012). Available at SSRN: https://ssrn.com/abstract=1961028 or http://dx.doi.org/10.2139/ssrn.1961028

Eric De Bodt

NHH-Caltech ( email )

18B AVENUE BECHET
Kraainem, 1950
Belgium
+32 475 24 01 69 (Phone)

Jean-Gabriel Cousin

Univ. Lille, ULR 4112 - LSMRC ( email )

1 place Déliot - BP381
Lille Cedex, 59020
France
33-3-2090-7606 (Phone)
33-3-2090-7629 (Fax)

Irina Demidova (Contact Author)

École des sciences de la gestion - Université du Québec à Montréal ( email )

315, rue Sainte-Catherine Est
Montréal, CA Québec H2X 3X2
Canada

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