The 52-Week High and M&A Deals: International Evidence

68 Pages Posted: 28 May 2024

See all articles by Pascal Büsing

Pascal Büsing

University of Münster - Finance Center Münster

Paul F. Hark

University of Münster - Finance Center Münster

Nils Lohmeier

University of Münster - Finance Center Münster

Hannes Mohrschladt

University of Muenster - Finance Center

Date Written: March 28, 2024

Abstract

Motivated by the seminal findings of Baker et al. (2012) and Ma et al. (2019), we examine the effects of stocks' 52-week highs on mergers and acquisitions in a global sample across 34 countries. First, we confirm that the targets' past stock price peaks serve as a reference point in merger negotiations, impacting both offer premia and the likelihood of deal acceptance. Second, we confirm that acquirers trading far below their 52-week high experience more positive market reactions. However, economic magnitude and statistical significance differ substantially across regions. In sum, the 52-week high plays a smaller role for M&A deals internationally compared to the United States.

Keywords: Mergers & Acquisitions, 52-Week High, Reference Point, Offer Price, Behavioral Corporate Finance, International Mergers

JEL Classification: G14, G34, G41

Suggested Citation

Büsing, Pascal and Hark, Paul and Lohmeier, Nils and Mohrschladt, Hannes, The 52-Week High and M&A Deals: International Evidence (March 28, 2024). Available at SSRN: https://ssrn.com/abstract=4776183 or http://dx.doi.org/10.2139/ssrn.4776183

Pascal Büsing (Contact Author)

University of Münster - Finance Center Münster ( email )

Universitätsstraße 14-16
Münster, 48143
Germany

Paul Hark

University of Münster - Finance Center Münster ( email )

Universitätsstraße 14-16
Münster, 48143
Germany

Nils Lohmeier

University of Münster - Finance Center Münster ( email )

Universitätsstraße 14-16
Münster, 48143
Germany

Hannes Mohrschladt

University of Muenster - Finance Center ( email )

Universitätsstr. 14-16
Muenster, 48143
Germany

HOME PAGE: http://www.wiwi.uni-muenster.de/fcm/en/the-fcm/lsf/team/hannes-mohrschladt

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