M&A Outcomes and Willingness to Sell

40 Pages Posted: 19 Sep 2012 Last revised: 5 Nov 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: March 30, 2012

Abstract

A seller’s display of willingness to sell (WTS) affects the probability that a sale will take place, the number of potentially interested acquirers, and bidding behaviors. This article investigates the net WTS wealth effect in a mergers and acquisitions framework by deriving a theoretical model that provides testable predictions. A proxy of the target WTS is based on deal initiation and the chosen selling procedure. The empirical analyses follow previous research and use information gathered from Securities and Exchange Commission filings. The results reveal, among other links, a negative relation between displayed WTS and target 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 (March 30, 2012). 29th International Conference of the French Finance Association (AFFI) 2012, Available at SSRN: https://ssrn.com/abstract=2080050 or http://dx.doi.org/10.2139/ssrn.2080050

Eric De Bodt (Contact Author)

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

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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