Value Ambiguity and Gains from Acquisitions of Unlisted Targets

Leonidas Barbopoulos, Krishna Paudyal and Gioia Pescetto

No 810, CRIEFF Discussion Papers from Centre for Research into Industry, Enterprise, Finance and the Firm

Abstract: This paper examines the announcement period and the post acquisition gains of UK acquirers of unlisted targets that are subject to value-ambiguity. The evidence shows that target’s age, size, intangibility of assets, and investments can explain the variations in bidding firm’s abnormal returns both in the short- and in the long-run. The findings further show that the gains to bidding firms acquiring unlisted targets are associated with the difficulty in valuing unlisted targets and the means of payment used.

Keywords: mergers and acquisitions; abnormal returns; value-ambiguity; unlisted firms; method of payment. (search for similar items in EconPapers)
JEL-codes: D81 D82 D83 G14 G34 (search for similar items in EconPapers)
Date: 2008-10
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Persistent link: https://EconPapers.repec.org/RePEc:san:crieff:0810

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