2013
DOI: 10.1016/j.intfin.2012.12.005
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The appeal of private targets in international acquisitions

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Cited by 17 publications
(13 citation statements)
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“…30 Figure 9 depicts the estimated quantity-weighted average marginal values in each auction normalized by subtracting the corresponding EONIA swap rate (a very similar pattern obtains if we normalized by the EUREPO rate). The emerging pattern again suggests that the (normalized) marginal values for liquidity provided in the primary market increased substantially following the 30 Since the goal of the ECB is to target the overnight interest rate, of which the 1-w EONIA swap rate is an expectation, this suggests that the ECB might have faced some problems with achieving its objectives in the postturmoil period. …”
Section: Resultsmentioning
confidence: 99%
See 1 more Smart Citation
“…30 Figure 9 depicts the estimated quantity-weighted average marginal values in each auction normalized by subtracting the corresponding EONIA swap rate (a very similar pattern obtains if we normalized by the EUREPO rate). The emerging pattern again suggests that the (normalized) marginal values for liquidity provided in the primary market increased substantially following the 30 Since the goal of the ECB is to target the overnight interest rate, of which the 1-w EONIA swap rate is an expectation, this suggests that the ECB might have faced some problems with achieving its objectives in the postturmoil period. …”
Section: Resultsmentioning
confidence: 99%
“…Most of the bidders in our data set are not publicly traded, thus publicly available information on these institutions is largely limited to quarterly or sometimes annual financial statements that are disclosed by these firms. Using Bankscope, we construct measures of return-on-equity (ROE) and return-on-assets (ROA), 42 which are standard performance indicators in the banking literature (Madura (2008)). We also compute the cost-to-…”
Section: Estimated Marginal Values and Bank Balance Sheetsmentioning
confidence: 99%
“…An asset acquisition resembles the acquisition of stand‐alone private firms and subsidiaries of other firms because they are categorized as unlisted targets. These targets are traded at considerable discounts relative to comparable publicly traded assets to account for the lack of liquidity (Madura & Susnjara, 2013; Officer, 2007). As such, the prospect of finding undervalued assets is high.…”
Section: Literature Review Hypothesis Development and Cross‐sectional Predictionsmentioning
confidence: 99%
“…A combination of this overpaying behavior and the documented adverse market reaction to the announcement of such bids implies an expropriation of current debtholders' wealth (Andrade et al, 2001). In contrast, the lack of an active secondary market combined with sellers' urgent need for liquidity enhance the possibility of deep discount in asset acquisitions (Brown et al, 1994; Gilson, 1990; Madura & Susnjara, 2013; Officer, 2007). Such arguments consolidate our conjecture that acquirers with debt covenants face less adversity from their debtholders in an asset acquisition as opposed to an equity acquisition.…”
Section: Introductionmentioning
confidence: 99%
“…Markets are complex systems in which many trader agents interact with each other (Markose, 2005). Every market is governed by a market institution (Madura, 2015; Mishkin and Eakins, 2015). A market institution specifies which bids and asks can be made and when and how a transaction takes place according to these bids and asks.…”
Section: Introductionmentioning
confidence: 99%