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Full-Text Articles in Business
Acquisitions Driven By Stock Overvaluation: Are They Good Deals?, Fangjian Fu, Leming Lin, Micah Officer
Acquisitions Driven By Stock Overvaluation: Are They Good Deals?, Fangjian Fu, Leming Lin, Micah Officer
Research Collection Lee Kong Chian School Of Business
Overvaluation may motivate a firm to use its stock to acquire a target whose stock is not as overpriced (Shleifer and Vishny (2003)). Though hypothetically desirable, these acquisitions in practice create little, if any, value for acquirer shareholders. Two factors often impede value creation: payment of a large premium to the target and lack of economic synergies in the acquisition. We find that overvaluationdriven stock acquirers suffer worse operating performance and lower long-run stock returns than control firms that are in the same industry, similarly overvalued at the same time, have similar size and Tobin’s q, but have not pursued …
2010 M&A Update, Carol M. Sanchez, Christina Seeber, Stephen R. Goldberg
2010 M&A Update, Carol M. Sanchez, Christina Seeber, Stephen R. Goldberg
Peer Reviewed Articles
Most of 2009 was slow for mergers and acquisitions (M&A), due to financial turmoil and economic uncertainty that carried over from late 2008. But the deal market rebounded in the fourth quarter of 2009 and 2010 appears to be much better for M&A than 2009. Yet while the global economy shows signs of recovery, and many buyers and sellers are flush with cash, M&A activity may begin slowly in the United States in 2011 due to uncertainty about the business outlook and potential tax changes. In this article, we briefly review M&A activity in the first half of 2010, and …