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|Title:||Two essays on shareholder returns and the form of financing in mergers and tender offers|
|Author(s):||Sung, Hyun Mo|
|Doctoral Committee Chair(s):||Lakonishok, Josef|
|Department / Program:||Business Administration, General
|Discipline:||Business Administration, General
|Degree Granting Institution:||University of Illinois at Urbana-Champaign|
|Subject(s):||Business Administration, General
|Abstract:||The first essay examines the determinants of returns for bidding firms' stocks in mergers and tender offers using cross-sectional micro-firm data. First, we find that potential overpayments to target shareholders are important for explaining cross-sectional differences in bidders' returns upon the announcement of mergers and tender offers. Second, we find that ceteris paribus cash offers are likely to be chosen by relatively cash rich and low growth firms, and stock exchange offers to be chosen by relatively cash poor and high growth firms. The latter finding is consistent with the pecking order hypothesis.
The second essay examines the determinants of rates of return for target firms' stocks in mergers and tender offers using cross-sectional micro-firm data. We find that the difference in abnormal returns between cash offers and stock exchange offers cannot be explained by the difference in tax liabilities of target shareholders between cash offers and stock exchange offers. An alternative explanation is that the expectation of future competition in tender offers might be higher than that in mergers, causing higher target abnormal returns in tender offers.
|Rights Information:||Copyright 1990 Sung, Hyun Mo|
|Date Available in IDEALS:||2011-05-07|
|Identifier in Online Catalog:||AAI9114430|