End-of-Day Price Manipulation and M&As
48 Pages Posted: 16 Oct 2018 Last revised: 20 Nov 2018
Date Written: September 25, 2018
Based on M&As over 45 countries from 2003-2014, we show that the presence of end-of-day (EOD) target price manipulation prior to M&As increases the probability of an M&A deal withdrawal, and decreases the premium paid. More detailed exchange trading rules that govern manipulation across countries and over time lower the probability of withdrawal, mitigate the negative impact of EOD manipulation on withdrawal, and raise premiums paid. Finally, while there are fewer cases of acquirer price manipulations prior to M&As, the data indicate positive acquirer price manipulation in share M&As increases the probability of deal withdrawal.
Keywords: Market Manipulation, M&As, Premiums, Regulation
JEL Classification: G14, G15, G18, G34, G38
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