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

    Leledakis, G.N. and Mamatzakis, Emmanuel and Pyrgiotakis, E.G. and Travlos, N.G. (2020) Does it pay to acquire private firms? Evidence from the U.S. banking industry. The European Journal of Finance , ISSN 1351-847X. (In Press)

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    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.

    Metadata

    Item Type: Article
    Keyword(s) / Subject(s): Mergers and acquisitions, banks, listing effect, financial advisor
    School: Other
    Divisions > Other

    School of Business, Economics & Informatics > Management
    Research Centres and Institutes: Accounting and Finance Research Centre
    Depositing User: Emmanuel Mamatzakis
    Date Deposited: 12 Aug 2020 10:54
    Last Modified: 18 Jun 2021 12:57
    URI: https://eprints.bbk.ac.uk/id/eprint/32841

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