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:
2015
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Repository URL:
https://ir.stthomas.edu/ocbfincpub/21
DOI:
10.1007/s12197-012-9247-6
Author(s):
Baxamusa, Mufaddal H; Georgieva, Dobrina
Publisher(s):
Springer Nature
Tags:
Economics, Econometrics and Finance; Tender-merger; Mergers and Acquisitions; Liquidity; Bargaining Power; Synergy; Finance and Financial Management
article description
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.