How Do Serial Acquirers Choose the Method of Payment?
Speaker
Abstract
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We show that serial acquirers appear to strategically shift between methods of payment in acquisitions based on changes in their own characteristics. In particular, they attempt to take advantage of their overvalued stock in making stock-financed acquisitions. Acquirer overvaluation significantly affects acquisition dynamics, increasing the speed to the next acquisition and affecting the propensity to pay with stock. Target overvaluation and uncertainty does not appear to play a significant role in the acquirer’s choice of payment method, suggesting that avoiding the winner’s curse is at best a secondary consideration for buyers. |
| Contact information: |
| Elvira Sojli |
| This event is an Erasmus Finance Seminar. The Erasmus Finance Seminar series brings prominent researchers in Finance from all over the world to Rotterdam. |
