Two-Step Acquisitions and Liquidity Spread

42 Pages Posted: 12 Mar 2013

Date Written: March 12, 2013

Abstract

We hypothesize that macro-level liquidity affects the choice between tender-mergers and mergers. We employ a novel methodology to test this relationship. This method finds structural breaks in the number of tender-mergers relative to mergers and finds that the structural breaks coincide strikingly well with major changes in macro-level liquidity. Consistent with our hypotheses our regression analysis finds that the number of tender offers increases with liquidity and also that the acquirer’s share of synergy increases as tender-mergers increase.

Keywords: tender-merger, Mergers and Acquisitions, liquidity, Bargaining Power, synergy

JEL Classification: G34, G18

Suggested Citation

Baxamusa, Mufaddal H. and Jandik, Dobrina Georgieva, Two-Step Acquisitions and Liquidity Spread (March 12, 2013). Journal of Economics and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2232137

Mufaddal H. Baxamusa (Contact Author)

University of St. Thomas ( email )

1000 LaSalle Ave.
Minneapolis, MN 55403
United States

Dobrina Georgieva Jandik

University of St. Thomas ( email )

1000 LaSalle Ave.
Minneapolis, MN 55403
United States

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