M&A Outcomes and Willingness to Sell
40 Pages Posted: 19 Sep 2012 Last revised: 5 Nov 2012
Date Written: March 30, 2012
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: Suggested Citation