Business Commons^™

Tacit Knowledge Transfer And Firm Growth: An Experience-Based Approach, Rory Eckardt

Doctoral Dissertations

Scholars frequently suggest that since tacit knowledge is valuable, heterogeneous among firms, and difficult to imitate, it has the potential to provide firms with a sustained competitive advantage. However, the nature of such knowledge can make it difficult for firms to expand and fully exploit its potential. Specifically, the individual orientation of tacit knowledge requires that such knowledge be transferred and replicated internally to achieve scale. This process is difficult and time intensive due to the articulation challenges associated with tacit knowledge. Thus, while tacit knowledge offers the potential for sustained advantage, the ability to realize such an advantage is …

Confronting The Peppercorn Settlement In Merger Litigation: An Empirical Analysis And A Proposal For Reform, Jill E. Fisch, Sean J. Griffith, Steven M. Davidoff

Steven Davidoff Solomon

Shareholder litigation challenging corporate mergers is ubiquitous, with the likelihood of a shareholder suit exceeding 90%. The value of this litigation, however, is questionable. The vast majority of merger cases settle for nothing more than supplemental disclosures in the merger proxy statement. The attorneys that bring these lawsuits are compensated for their efforts with a court-awarded fee. This leads critics to charge that merger litigation benefits only the lawyers who bring the claims, not the shareholders they represent. In response, defenders of merger litigation argue that the lawsuits serve a useful oversight function and that the improved disclosures that result …

Essays On Corporate Finance, Hari Prasad Adhikari

USF Tampa Graduate Theses and Dissertations

We compare acquisition activity, method of payment choice, and the long-run value implications of acquisitions by newly public single-class and dual-class US companies. Our results show that dual-class IPO firms make relatively more acquisitions in innovative industries and are less likely to pay with stock as compared to single-class IPO firms. We provide evidence that the reluctance of dual-class firms to pay with stock is not related to the insiders' cash-flow rights but it is significantly positively related to the insiders' voting rights and wedge between the insiders' voting rights and cash-flow rights. We also find that acquiring dual-class IPOs …

Impact Of The Ceo Effect On Premiums In Mergers And Acquisitions, Caitlin Duncan

Honors Scholar Theses

The rationale behind a merger or acquisition is to improve the financial performance of the acquiring firm. Many factors go into the the valuation of a company and consequently the premium paid.

This paper will examine what impact upper management, specifically the CEO, has on the valuation of a company during mergers and acquisitions. This impact, called the CEO effect, will be central to the paper. Different valuation methods of this effect, as well as firm valuations, will be analyzed and considered. Specifically, how the CEO effect affects the premium paid by the acquiring firm will be the main focus. …

Acquisitions Driven By Stock Overvaluation: Are They Good Deals?, Fangjian Fu, Leming Lin, Micah Officer

Micah S. Officer

Theory and recent evidence suggest that overvalued firms can create value for shareholders if they exploit their overvaluation by using their stock as currency to purchase less overvalued firms. We challenge this idea and show that, in practice, overvalued acquirers significantly overpay for their targets. These acquisitions do not, in turn, lead to synergy gains. Moreover, these acquisitions seem to be concentrated among acquirers with the largest governance problems. CEO compensation, not shareholder value creation, appears to be the main motive behind acquisitions by overvalued acquirers.

Deal Innovations In Mergers And Acquisitions: Do Go-Shop Provisions Create Real Benefits?, Chenguang Shang

Wayne State University Dissertations

Along with the private equity boom in the mid-2000s emerged a new M&A deal technology - the "go-shop" provision. In this paper, I address the question whether go-shop provisions are utilized by target managers to pursue private benefits or are used to protect the fiduciary interests of the target shareholder. I investigate the effectiveness of go-shop provisions by empirically testing two competing hypotheses: (a) the window-dressing hypothesis, and (b) the shareholder interest hypothesis.

This is the first study to shed light on the impact of go-shop provisions on the wealth of both the target and the bidder shareholders, and thereby …

2014 M&A Update, Alexandra S. Schmid, Carol M. Sanchez, Stephen R. Goldberg

Peer Reviewed Articles

Market conditions for mergers and acquisitions (M&As) remained positive in 2013. Relative economic growth in the U.S. and within specific industry sectors, and positive economic developments in the emerging markets signaled an optimistic outlook for M&A activity. There was a decline in worldwide M&A transactions in the first half of 2013 following a modest gain in 2012 which resulted in an overall slowdown in M&A activities, yet there are positive signs for future M&A growth. Corporate executives and their boards were selective with their investment choices and sought many of their M&A opportunities in the middle market. In this article, …

Bankers And Chancellors, William W. Bratton, Michael L. Wachter

All Faculty Scholarship

The Delaware Chancery Court recently squared off against the investment banking world with a series of rulings that tie Revlon violations to banker conflicts of interest. Critics charge the Court with slamming down fiduciary principles of self-abnegation in a business context where they have no place or, contrariwise, letting culpable banks off the hook with ineffectual slaps on the wrist. This Article addresses this controversy, offering a sustained look at the banker-client advisory relationship. We pose a clear answer to the questions raised: although this is nominally fiduciary territory, both banker-client relationships and the Chancery Court’s recent interventions are contractually …

Two Essays On Nonbank Financial Institutions, Di Kang

Theses and Dissertations--Finance and Quantitative Methods

Evidence shows that nonbanks, which are now significant participants in the corporate loan market, exploit information gained from lending to trade in public securities. In the first essay, I examine whether these institutions use loan-based information to facilitate merger and acquisition (M&A) deals. I find that firms are more likely to become targets if they borrow from nonbanks rather than banks. Borrowing from a larger number of nonbanks or from those with a sizeable client network also enhances a firm’s acquisition prospects. When nonbanks gain more information about borrowers through loan amendments or multiple loans, the impact of nonbank lending …