Two-step acquisitions and liquidity spread
- Citation data:
Journal of Economics and Finance, ISSN: 1055-0925, Vol: 39, Issue: 2, Page: 262-287
- Publication Year:
- Economics, Econometrics and Finance; Tender-merger; Mergers and Acquisitions; Liquidity; Bargaining Power; Synergy; Finance and Financial Management
We hypothesize that macro-level liquidity affects the choice between tender-mergers and mergers. We employ a novel methodology to test this relationship. This method finds structural breaks in the number of tender-mergers relative to mergers and finds that the structural breaks coincide strikingly well with major changes in macro-level liquidity. Consistent with our hypotheses our regression analysis finds that the number of tender offers increases with liquidity and also that the acquirer’s share of synergy increases as tender-mergers increase.