On the determinants of the dynamic choice between mergers and tender offers

• Tipo: Artigo em Revista Científica Internacional
• Data: 2023

Autores

Lukas, E (Autor) Outra; Pereira, PJ (Autor) FEP; Rodrigues, Artur (Autor) FEP

Revista

Título: JOURNAL OF CORPORATE FINANCE

Vol. 83

ISSN: 0929-1199

Indexação

ISI Web of Knowledge - 0 Citações

Scopus - 0 Citações

Outras Informações

ID Authenticus: P-00Z-3XR

DOI: 10.1016/j.jcorpfin.2023.102489

Abstract (EN): This paper builds on recent advances in the domain of dynamic M&A option games under uncertainty and looks closer at the determinants that drive the strategic choice between mergers and tender offers. In particular, our model sheds new light in understanding the effects of uncertainty and relative size of firms on the choice of the M&A strategy. We not only show that uncertainty and relative size do impact the choice of the strategy, but we also show that the impact of uncertainty is non-monotonic. In fact, tender offers are more likely in a context of relatively low/high volatility. For intermediate uncertainty values mergers become more likely. Furthermore, the smaller/weaker the target relative to the bidder the more likely are tender offers. Additionally, our model also shows that the tender offer payoff is larger than the merger payoff, suggesting that larger combined CARs should be observed for tender offers. Our empirical study gives support to these results.

Idioma: Inglês

Tipo (Avaliação Docente): Científica

Nº de páginas: 18