Timings, terms and agency problems in mergers and acquisitions

Yuanbin Wang and Peijun Guo

International Journal of Information and Decision Sciences, 2015, vol. 7, issue 4, 287-311

Abstract: In this research, we analyse the timings, terms and agency problems in mergers and acquisitions where each firm optimally exercises its own exchange option and the timing and terms are determined endogenously. The theoretical analysis shows that the competition amongst the bidders will speed up merger and decrease the winning bidder's share in the post-merger firm; the agency problem will speed up or delay takeover. The managerial insights have been gained by the theoretical analysis.

Keywords: real options; mergers and acquisitions; M%A; game theory; agency problems; timing; terms. (search for similar items in EconPapers)
Date: 2015
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