Columbia Law School
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Unravelling Bidding Strategies in M&A Transactions
Despite the trillions of dollars spent annually on mergers and acquisitions (M&A)[1], surprisingly little is known about the bidding strategies of potential acquirers and how negotiations unfold. For example, do bidders begin with a low-premium offer and increase …
How FinTech Affects Corporate Takeover Markets
Investment in financial technology, or FinTech, has increased dramatically over the past decade – from a total value of $9 billion worldwide in 2010 to well above $100 billion in recent years, with a peak of $215 billion in 2019. …
The Real Merger Gains: Correcting for Partial Anticipation
Previous takeover studies document a puzzlingly skewed division of gains between target and acquirer firms. The targets gain a hefty bid premium, while acquirers’ returns are insignificant or slightly negative around bid announcement dates. Thus, the question arises, Why do …
Leaks and Takeovers
When firms are takeover targets, they often experience a rise – or run-up – in the price of their stock even before the takeover is publicly announced. The common wisdom about run-ups is that information about the impending takeover is …
Are Directors Holding Multiple Board Seats Too Busy or Well-Connected?
Directors frequently hold multiple board seats, simultaneously lending their expertise to the boards of multiple firms. Director “busyness” is often thought to be detrimental to firm performance, as it leaves directors with insufficient time to devote to their duties at …
Information Challenges and the Use of Earnouts in Mergers and Acquisitions
In mergers and acquisitions transactions with privately-held target companies, transacting parties will often agree to make payments to the target shareholders contingent upon some post-closing events. One frequently used mechanism is an earnout. With an earnout, the parties will agree …