The role of medium of exchange in merger offers: examination of terminated merger proposals. (Venture Capital Special Issue)
From: Financial Management
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Date: 9/22/1994
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Author: Hudson, Carl D.; Jensen, Marlin R.H.; Sullivan, Michael J.
In this study, we examine the relation between the medium of exchange (cash or stock) and valuation effects associated with terminated merger proposals. We find significantly higher returns for target shareholders after termination of stock offers. This difference persists even when a subsequent merger bid does not follow and regardless of the following factors: the party deciding to terminate the offer, the presence of an acquisition program, prior foothold position, relative size of the ...
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