Research Repository

Does it pay to acquire private firms? Evidence from the U.S. banking industry

Leledakis, George and Mamatzakis, Emmanuel and Pyrgiotakis, Emmanouil and Travlos, Nickolaos (2020) 'Does it pay to acquire private firms? Evidence from the U.S. banking industry.' The European Journal of Finance, Online. 1 - 23. ISSN 1351-847X

[img] Text
Final_EJF_paper.pdf - Accepted Version
Restricted to Repository staff only until 30 January 2022.

Download (1MB) | Request a copy

Abstract

We extend the U.S. bank M&As literature by examining bidder announcement abnormal returns in deals involving both public and private targets over a 32-years examination period. Our main findings document the existence of a listing effect in our sample. Banks gain when they acquire private firms and lose when they acquire public firms. Gains in private offers are even higher when bidders employ financial advisors, whereas the opposite is true for public deals. We argue that this adverse advisor effect relates to the different levels of information asymmetry between public and private targets. Our results remain robust when we control for usual determinants of bidder abnormal returns, such as the method of payment, size, or relative size and when we control for sample selection and endogeneity problems.

Item Type: Article
Uncontrolled Keywords: Mergers and acquisitions, banks, listing effect, financial advisor
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 13 Aug 2020 16:15
Last Modified: 04 Mar 2021 16:15
URI: http://repository.essex.ac.uk/id/eprint/28283

Actions (login required)

View Item View Item