Appraisal Rights and Corporate Disclosure during Mergers and Acquisitions

68 Pages Posted: 9 Mar 2021 Last revised: 3 Jul 2023

See all articles by Christopher R. Stewart

Christopher R. Stewart

University of Chicago - Booth School of Business

Date Written: July 26, 2022

Abstract

Target shareholders have the right to ask for a higher merger price if good news emerges after a merger agreement. This “appraisal right” varies with state law and was substantially strengthened in Delaware in 2007. I examine how target managers respond to changes in this right. If target managers represent target shareholders, the managers would be more likely to release good news, but I find they are more likely to withhold good news when appraisal rights are higher. This suggests agency problems and collusion on the part of target managers, and thus my paper adds to the larger literature that considers agency problems on the part of managers.

Keywords: Appraisal Laws, Shareholder Property Rights, Mergers and Acquisitions, Corporate Disclosure

JEL Classification: G32, K22, G34, M41

Suggested Citation

Stewart, Christopher R., Appraisal Rights and Corporate Disclosure during Mergers and Acquisitions (July 26, 2022). Journal of Accounting & Economics (JAE), Vol. 75, No.1, 2023, Available at SSRN: https://ssrn.com/abstract=3799216 or http://dx.doi.org/10.2139/ssrn.3799216

Christopher R. Stewart (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S Woodlawn Ave
Chicago, IL 60637
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
475
Abstract Views
1,622
Rank
109,133
PlumX Metrics