Means of Payment in Takeovers: Results for the UK and US

Julian R Franks, Robert Harris and Colin Mayer ()

No 200, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: 2,500 acquisitions in the United Kingdom and United States are used to examine means of payment in acquisitions. There has been a substantial increase in the proportion of acquisitions financed with cash in the United States over the period of the study from 1955 to 1985. Mixed bids are more common in the UK. Bid premia are significantly larger in cash than equity acquisitions and the differences cannot be wholly attributed to the nature of the bid. Cash acquisitions display a better post acquisition performance than equity. These results bear directly on theories of acquisition finance and cast serious doubt on several commonly cited factors.

Keywords: Acquisitions; Corporate Raiders; Means of Payment; Takeovers (search for similar items in EconPapers)
Date: 1987-09
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Working Paper: Means of Payment in Takeovers: Results for the U.K. and U.S (1987)
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