Adra, S. orcid.org/0000-0002-0187-2607 and Barbopoulos, L.G. (2018) The valuation effects of investor attention in stock-financed acquisitions. Journal of Empirical Finance, 45. pp. 108-125. ISSN 0927-5398
Abstract
Limited investor attention allows overvalued companies to engage in stock-financed acquisitions of listed target firms without experiencing significant reductions in existing valuations. Our robust findings show that overvalued stock-paying acquirers that are subject to limited investor attention do not experience significant announcement period wealth losses. However, the overvaluation of these acquirers is corrected in the post-announcement period. By contrast, the overvalued acquirers that receive high investor attention and use stock as the payment method in their listed target acquisitions experience negative announcement period abnormal returns. The widely documented evidence that stock-financed acquisitions are associated with significant announcement period wealth losses is primarily driven by deals in which the acquirers are subject to high investor attention.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | Crown Copyright © 2017 Published by Elsevier B.V. This is an author produced version of a paper subsequently published in Journal of Empirical Finance. Uploaded in accordance with the publisher's self-archiving policy. Article available under the terms of the CC-BY-NC-ND licence (https://creativecommons.org/licenses/by-nc-nd/4.0/). |
Keywords: | Investor attention; Corporate takeovers; Payment method; Acquirer abnormal returns |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 13 Sep 2021 11:29 |
Last Modified: | 13 Sep 2021 11:29 |
Status: | Published |
Publisher: | Elsevier BV |
Refereed: | Yes |
Identification Number: | 10.1016/j.jempfin.2017.10.001 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:178117 |
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Licence: CC-BY-NC-ND 4.0