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Author: Anastasia Stepanova
Publisher:
ISBN:
Category :
Languages : en
Pages : 35
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Book Description
This article examines the presence of the reference price effect in mergers and acquisitions in Russia, which can act as a distortion in investor perception of the influence a deal has on a company. In this study we use the Russian market as a laboratory for the investigation of behavioral effects in a relatively inefficient market. We find a relationship between the acquirer's announcement period return and the proximity of its pre-announcement share price to the 52-week high. The 52-week high serves as a salient anchor even though it is economically irrelevant for valuation purposes. This effect appears to be stronger for deals associated with higher levels of uncertainty. The findings confirm the presence of the anchoring bias in evaluating the effect of a merger or acquisition announcement by Russian investors. We demonstrate a significant anchoring effect even for deals with a blocking (>10%) or a controlling stake (>25%) in an emerging market with a highly concentrated ownership.
Author: Anastasia Stepanova
Publisher:
ISBN:
Category :
Languages : en
Pages : 35
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Book Description
This article examines the presence of the reference price effect in mergers and acquisitions in Russia, which can act as a distortion in investor perception of the influence a deal has on a company. In this study we use the Russian market as a laboratory for the investigation of behavioral effects in a relatively inefficient market. We find a relationship between the acquirer's announcement period return and the proximity of its pre-announcement share price to the 52-week high. The 52-week high serves as a salient anchor even though it is economically irrelevant for valuation purposes. This effect appears to be stronger for deals associated with higher levels of uncertainty. The findings confirm the presence of the anchoring bias in evaluating the effect of a merger or acquisition announcement by Russian investors. We demonstrate a significant anchoring effect even for deals with a blocking (>10%) or a controlling stake (>25%) in an emerging market with a highly concentrated ownership.
Author: Jan Gropp
Publisher: GRIN Verlag
ISBN: 365631523X
Category : Business & Economics
Languages : en
Pages : 89
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Book Description
Master's Thesis from the year 2012 in the subject Business economics - Investment and Finance, grade: 1.0, Copenhagen Business School, course: Corporate Finance, language: English, abstract: Several studies show that people are often influenced by reference points which are derived from the context at hand in estimations or decisions under uncertainty. This analysis deals with the importance of reference points in the UK and to a lesser extent the European takeover market. Applying "prospect theory" to equity investment we would predict that shareholders value gains and losses relative to a reference point in a very human fashion. In a psychological bias called the "anchoring effect", investors adopt irrelevant salient anchor values as reference points and are biased towards these. We follow these predictions and, in this thesis, test historic peak prices as anchor values in corporate takeovers for bidder and target management as well as shareholders. Firstly, we analyze whether bid prices are affected by the 13-, 26-, 39-, 52- and 65-week high prices. Secondly, we are interested in whether for companies whose valuation has fallen far from the historic peaks, these anchor values are of lesser relevance, consistent with the S-shaped form of the prospect theory value function. Finally, bidding above the historic peak prices is tested and analyzed, in whether this entails a higher probability of bidding success. For the purpose of the thesis, a dataset of in total 1602 takeover bids for listed companies in the United Kingdom (1559), Germany (36) and Poland (7) from Thomson ONE Banker was constructed. The sample includes bids announced and completed in the time period of 1985 - 2011. Data on stock price history for the target companies was extracted from Thomson Reuters Datastream. OLS regression, Gaussian Kernel Regression, Piecewise Linear Regression and Probit regressions are the tools employed to thoroughly analyze the data. We find that all historic reference values examined exhibit statistically significant impact on the bidder offer prices with diminishing impact of the reference prices observed for extreme values. Importantly, no statistically significant evidence that bidding above historic peak prices secures a higher acceptance rate from target shareholders was discovered. This finding does not support the reference point thinking for target shareholders. The same is true for offer price increases. Offer prices below peak prices do not carry a higher probability of being amended than offer prices ranging above reference prices.
Author: Rémi Français
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This study analyzes how reference points and anchoring bias influence different aspects of the Merger & Acquisitions (M&A) process in Europe. Motivated by the recent findings of Baker, Pan, and Wurgler (2012) in the US, this study uses a sample of 5,081 M&A transactions involving European publicly traded targets with announcement date between 1985 and 2017. The results show that the reference point effect influences various aspects of the M&A-process in Europe but is not as pronounced as in the US. Consistent with related studies, it is found that the relationship between the distance of the target's stock price with its 52-week high and the offer price is positive but nonlinear, that bidding above the 52-week high leads to a moderate jump in the probability of success and that the component of the offer price driven by the 52-week high is associated with lower bidder's announcement returns and thus with overpayment. This study contributes to the existing literature by showing that compared to domestic transactions, cross-border deals in Europe are slightly more affected by the reference point effect, supporting the idea that reference point appeals particularly to decision makers facing increased information asymmetry. Additional tests show that the interaction between the bidder and the target's reference point can predict the method of payment and the management attitude towards the deal in Europe. These results support the idea that managers time the market for their M&A activities, using salient but irrelevant numbers as heuristics for their investment decisions.
Author: Alexandra Merle Post
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 280
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Book Description
Provides major force in international financial economics- mergers, takeovers, and corporate control.
Author: David R. King
Publisher: Edward Elgar Publishing
ISBN: 1035319071
Category : Business & Economics
Languages : en
Pages : 243
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Book Description
This Research Agenda poses unique questions and perspectives on how to generate impactful research on mergers and acquisitions. Bringing together a mix of established and emerging scholars, it outlines how future research in the field can enable managers to make better decisions and improve mergers and acquisition success.
Author: Florian Frensch
Publisher: Springer Science & Business Media
ISBN: 3835095765
Category : Business & Economics
Languages : en
Pages : 494
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Book Description
Florian Frensch investigates which individual characteristics of employees and which dyadic factors of relationship partners affect the cooperation between employees of previously separated firms. The author develops an innovative approach for gathering network data with the help of a dynamic computer-based questionnaire which allows him to conduct a full network analysis of a group of approximately 400 employees on the lower operative level of the firms.
Author: Yushi Jiang
Publisher: Springer Nature
ISBN: 9464630361
Category : Business & Economics
Languages : en
Pages : 1906
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Book Description
This is an open access book. With the support of universities and the research of AEIC Academic Exchange Center, The 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022) will be held in Dali from June 24th to 26th. Compared with previous conferences, it will discuss more in-depth economic independent innovation, open cooperation and innovative business culture under the background of the new development stage, new situation and new journey era. There will be a broad exchange environment. Well-known experts, scholars or entrepreneurs in the field will be invited to make keynote reports. Contributing authors are also very welcome to actively participate in the conference and build an academic exchange ceremony.
Author: Scott Hempling
Publisher: Edward Elgar Publishing
ISBN: 1839109467
Category : Law
Languages : en
Pages : 576
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Book Description
What happens when electric utility monopolies pursue their acquisition interests—undisciplined by competition, and insufficiently disciplined by the regulators responsible for replicating competition? Since the mid-1980s, mergers and acquisitions of U.S. electric utilities have halved the number of local, independent utilities. Mostly debt-financed, these transactions have converted retiree-suitable investments into subsidiaries of geographically scattered conglomerates. Written by one of the U.S.’s leading regulatory thinkers, this book combines legal, accounting, economic and financial analysis of the 30-year march of U.S. electricity mergers with insights from the dynamic field of behavioral economics.
Author: Robert F. Bruner
Publisher: John Wiley & Sons
ISBN: 1118436393
Category : Business & Economics
Languages : en
Pages : 1056
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Book Description
A comprehensive guide to the world of mergers and acquisitions Why do so many M&A transactions fail? And what drives the success of those deals that are consummated? Robert Bruner explains that M&A can be understood as a response by managers to forces of turbulence in their environment. Despite the material failure rates of mergers and acquisitions, those pulling the trigger on key strategic decisions can make them work if they spend great care and rigor in the development of their M&A deals. By addressing the key factors of M&A success and failure, Applied Mergers and Acquisitions can help readers do this. Written by one of the foremost thinkers and educators in the field, this invaluable resource teaches readers the art and science of M&A valuation, deal negotiation, and bargaining, and provides a framework for considering tradeoffs in an effort to optimize the value of any M&A deal.
Author: Max H Bazerman
Publisher: Legare Street Press
ISBN: 9781021260178
Category :
Languages : en
Pages : 0
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Book Description
In this compelling book, John S. Carroll and Max H. Bazerman explore the complex cognitive processes involved in effective negotiation. Drawing on the latest research in psychology and negotiation theory, this book provides practical guidance for negotiators at all levels. This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work is in the "public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.
