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Departmental Research Series : Finance: Jan Jindral : February 26, 2014
11:00 AM to 12:30 PM
The Department of Finance would like to invite you to today's presentation by Jan Jindral, He will be presenting his paper, co-authored by Thomas Moeller, "Learning About Target Firms and Pricing of Acquisitions."
Abstract: We analyze the effects of learning about target firms on acquisition pricing. Newly public firms should be more opaque than established firms with long track records. An acquirer with superior information about a newly public firm can negotiate a favorable takeover price because less-informed potential acquirers have a bidding handicap. Consistent with the effects of learning, acquirer announcement returns decrease and takeover premiums increase with the length of time since the targets’ initial public offerings. Our results provide new insights into the determinants of acquirer announcement returns and the effects of learning on acquisition pricing. Moreover, our results suggest that the reason why acquirer announcement returns in acquisitions of public targets are significantly lower than in acquisitions of private targets is not only the abrupt change in the target’s listing status, but also a more gradual process of learning and diminishing of target valuation uncertainty.
Business School Dean's Office
Ramie FernandezTel 408 554-4385