Bargaining merger terms and the effect on the announcement returns
Autor(a) principal: | |
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Data de Publicação: | 2019 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | https://hdl.handle.net/1822/65726 |
Resumo: | This paper develops a dynamic model for the timing and terms of mergers. In contrast to other models, we show that firms agree about the timing independently from how the merger surplus is shared or their bargaining power. We show that, under asymmetry of information, the combination of surprises on the merger timing and the merger terms, can produce negative or positive abnormal announcement returns for the merging firms. The abnormal returns are also possible under perfect information, even if the announcements are expected by the market, and occur as a result of the event-study methodology. |
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Bargaining merger terms and the effect on the announcement returnsMerger termsMerger timingBargainingUncertaintyReal optionsEvent studiesCiências Sociais::Economia e GestãoSocial SciencesThis paper develops a dynamic model for the timing and terms of mergers. In contrast to other models, we show that firms agree about the timing independently from how the merger surplus is shared or their bargaining power. We show that, under asymmetry of information, the combination of surprises on the merger timing and the merger terms, can produce negative or positive abnormal announcement returns for the merging firms. The abnormal returns are also possible under perfect information, even if the announcements are expected by the market, and occur as a result of the event-study methodology.This research has been financed by the European Regional Development Fund through COMPETE 2020 -Programa Operacional Competitividade e Internacionalizacho (POCI) and by Portuguese public funds through FCT in the framework of the projects POCI-01-0145-FEDER-006683 (Artur Rodrigues) and POCI-01-0145-FEDER-006890 (Paulo J. Pereira). We thank Alcino Azevedo, Bart Lambrecht, Dean Paxson, Elmar Lukas, Luis Aguiar-Conraria, Rosa Branca-Esteves, and participants of the 2015 Annual Real Options Conference for their helpful comments. Any remaining errors are the sole responsibility of the authors.Elsevier Science BVUniversidade do MinhoPereira, Paulo J.Rodrigues, Artur2019-01-012019-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttps://hdl.handle.net/1822/65726engPereira, P. J., & Rodrigues, A. (2019, January). Bargaining merger terms and the effect on the announcement returns. International Review of Economics & Finance. Elsevier BV. http://doi.org/10.1016/j.iref.2018.10.0151059-056010.1016/j.iref.2018.10.015https://www.sciencedirect.com/science/article/pii/S1059056017302484info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-21T12:29:43Zoai:repositorium.sdum.uminho.pt:1822/65726Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T19:24:45.330803Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Bargaining merger terms and the effect on the announcement returns |
title |
Bargaining merger terms and the effect on the announcement returns |
spellingShingle |
Bargaining merger terms and the effect on the announcement returns Pereira, Paulo J. Merger terms Merger timing Bargaining Uncertainty Real options Event studies Ciências Sociais::Economia e Gestão Social Sciences |
title_short |
Bargaining merger terms and the effect on the announcement returns |
title_full |
Bargaining merger terms and the effect on the announcement returns |
title_fullStr |
Bargaining merger terms and the effect on the announcement returns |
title_full_unstemmed |
Bargaining merger terms and the effect on the announcement returns |
title_sort |
Bargaining merger terms and the effect on the announcement returns |
author |
Pereira, Paulo J. |
author_facet |
Pereira, Paulo J. Rodrigues, Artur |
author_role |
author |
author2 |
Rodrigues, Artur |
author2_role |
author |
dc.contributor.none.fl_str_mv |
Universidade do Minho |
dc.contributor.author.fl_str_mv |
Pereira, Paulo J. Rodrigues, Artur |
dc.subject.por.fl_str_mv |
Merger terms Merger timing Bargaining Uncertainty Real options Event studies Ciências Sociais::Economia e Gestão Social Sciences |
topic |
Merger terms Merger timing Bargaining Uncertainty Real options Event studies Ciências Sociais::Economia e Gestão Social Sciences |
description |
This paper develops a dynamic model for the timing and terms of mergers. In contrast to other models, we show that firms agree about the timing independently from how the merger surplus is shared or their bargaining power. We show that, under asymmetry of information, the combination of surprises on the merger timing and the merger terms, can produce negative or positive abnormal announcement returns for the merging firms. The abnormal returns are also possible under perfect information, even if the announcements are expected by the market, and occur as a result of the event-study methodology. |
publishDate |
2019 |
dc.date.none.fl_str_mv |
2019-01-01 2019-01-01T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
https://hdl.handle.net/1822/65726 |
url |
https://hdl.handle.net/1822/65726 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Pereira, P. J., & Rodrigues, A. (2019, January). Bargaining merger terms and the effect on the announcement returns. International Review of Economics & Finance. Elsevier BV. http://doi.org/10.1016/j.iref.2018.10.015 1059-0560 10.1016/j.iref.2018.10.015 https://www.sciencedirect.com/science/article/pii/S1059056017302484 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Elsevier Science BV |
publisher.none.fl_str_mv |
Elsevier Science BV |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799132729082642432 |