Holistic bidding strategies: Addressing target shareholders’ behavioral resistance in M&As

IF 7.4 2区经济学 Q1 BUSINESS, FINANCE

Finance Research Letters Pub Date : 2025-01-18 DOI:10.1016/j.frl.2025.106822

Beni Lauterbach , Blake Loriot , Yevgeny Mugerman , Joshua Shemesh

引用次数: 0

Abstract

The study examines how behavioral considerations of target shareholders affect deal completion likelihood. Lauterbach, Mugerman and Shemesh (2024) show that bidders adjust their offer prices to accommodate target shareholders’ loss aversion, and we find that these premium adjustments appear to mitigate potential bid resistance. Our tests, conducted in an extensive sample of all U.S. public firm merger offers in 1990–2019, suggest a holistic pricing strategy among bidders: the offer price is based not only on intrinsic values and financial analysis; it also usually incorporates the price adjustment necessary to neutralize target shareholders’ behavioral resistance, thereby facilitating deal acceptance.

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来源期刊

Finance Research Letters BUSINESS, FINANCE-

CiteScore

11.10

自引率

14.40%

发文量

863

期刊介绍： Finance Research Letters welcomes submissions across all areas of finance, aiming for rapid publication of significant new findings. The journal particularly encourages papers that provide insight into the replicability of established results, examine the cross-national applicability of previous findings, challenge existing methodologies, or demonstrate methodological contingencies. Papers are invited in the following areas: Actuarial studies Alternative investments Asset Pricing Bankruptcy and liquidation Banks and other Depository Institutions Behavioral and experimental finance Bibliometric and Scientometric studies of finance Capital budgeting and corporate investment Capital markets and accounting Capital structure and payout policy Commodities Contagion, crises and interdependence Corporate governance Credit and fixed income markets and instruments Derivatives Emerging markets Energy Finance and Energy Markets Financial Econometrics Financial History Financial intermediation and money markets Financial markets and marketplaces Financial Mathematics and Econophysics Financial Regulation and Law Forecasting Frontier market studies International Finance Market efficiency, event studies Mergers, acquisitions and the market for corporate control Micro Finance Institutions Microstructure Non-bank Financial Institutions Personal Finance Portfolio choice and investing Real estate finance and investing Risk SME, Family and Entrepreneurial Finance