1 Introduction
2 Literature review and hypotheses development
2.1 Acquirers’ overvaluation and payment methods
2.2 Targets’ rationality and payment methods
3 Data and method
3.1 Sample selection
N | Cash | Stock | Mixed | % | ||
---|---|---|---|---|---|---|
Panel A: Distribution by Industry SIC Code | ||||||
01–09 | Agriculture, Forestry, Fishing | 1 | 1 | 0 | 0 | 0.09 |
10–14 | Mining | 72 | 35 | 12 | 25 | 6.23 |
15–17 | Construction | 8 | 8 | 0 | 0 | 0.69 |
20–39 | Manufacturing | 499 | 428 | 14 | 57 | 43.20 |
40–49 | Transportation & Public Utilities | 138 | 88 | 17 | 33 | 11.95 |
50–51 | Wholesale Trade | 40 | 32 | 1 | 7 | 3.46 |
52–59 | Retail Trade | 33 | 23 | 5 | 5 | 2.86 |
60–67 | Finance, Insurance, Real Estate | 247 | 137 | 44 | 66 | 21.39 |
70–89 | Services | 117 | 99 | 3 | 15 | 10.13 |
91–99 | Public Administration | 0 | 0 | 0 | 0 | 0.00 |
Total | 1155 | 851 | 96 | 208 | 100.00 | |
Panel B: Distribution by Year | ||||||
2009 | 85 | 48 | 11 | 26 | 8.29 | |
2010 | 142 | 103 | 12 | 27 | 12.56 | |
2011 | 133 | 101 | 14 | 18 | 11.18 | |
2012 | 162 | 128 | 7 | 27 | 14.75 | |
2013 | 168 | 122 | 13 | 33 | 14.06 | |
2014 | 200 | 153 | 20 | 27 | 16.01 | |
2015 | 202 | 141 | 17 | 44 | 17.40 | |
2016 | 63 | 55 | 2 | 6 | 5.76 | |
Total | 1155 | 851 | 96 | 208 | 100.00 |
3.2 Overvaluation and misvaluation measures
Mean | Median | Std. Dev | Δ Mean | Δ Median | |
---|---|---|---|---|---|
Cash—Stock | Cash—Stock | ||||
Panel A: All-cash Financed M&A (N = 851) | |||||
Acquirers’ Overvaluation (N = 851) | |||||
EXVIA | − 0.52 | − 0.60 | 0.41 | − 0.23*** | − 0.30*** |
MBIA | 0.32 | 0.27 | 0.67 | 0.21*** | 0.32*** |
MACRO | 0.09 | 0.11 | 0.14 | 0.01 | − 0.01 |
MI – Overvaluation | 0.49 | 0.49 | 0.15 | − 0.05*** | − 0.05*** |
Acquirers’ Misvaluation (N = 851) | |||||
|EXVIA| | 0.61 | 0.63 | 0.29 | 0.24*** | 0.29*** |
|MBIA| | 0.53 | 0.41 | 0.52 | − 0.04 | − 0.04 |
MI – Mispricing | 0.51 | 0.51 | 0.15 | 0.05*** | 0.05*** |
Targets’ Overvaluation (N = 191) | |||||
EXVIA | − 0.84 | − 0.82 | 0.20 | − 0.14*** | − 0.12*** |
MBIA | 0.21 | 0.15 | 1.01 | − 0.01 | 0.10 |
MACRO | 0.08 | 0.09 | 0.15 | 0.00 | − 0.01 |
MI – Overvaluation | 0.47 | 0.48 | 0.17 | 0.02*** | 0.01*** |
Targets’ Misvaluation (N = 191) | |||||
|EXVIA| | 0.87 | 0.83 | 0.19 | 0.17*** | 0.12*** |
|MBIA| | 0.53 | 0.25 | 0.70 | 0.17* | 0.11* |
MI – Mispricing | 0.54 | 0.55 | 0.15 | 0.08*** | 0.09*** |
Acquirers’ Financials | |||||
Total Assets ($mil) | 30818 | 7645 | 98925 | 17321*** | 3895*** |
Dividend Payout ($mil) | 678 | 116 | 1537 | 406*** | 62*** |
Leverage | 0.45 | 0.37 | 0.62 | − 0.28*** | − 0.15*** |
Collateral | 0.26 | 0.15 | 0.26 | − 0.06** | − 0.06 |
Return-on-equity | 0.22 | 0.20 | 0.43 | 0.09 | 0.09 |
Market-to-book | 3.39 | 2.21 | 7.27 | 1.50*** | 0.88*** |
Closely Held Shares | 8.00 | 1.52 | 14.02 | − 5.84*** | − 4.02*** |
Deal-related Features | |||||
Relative Deal Size | 0.14 | 0.07 | 0.19 | − 0.21*** | − 0.26*** |
Deal Value ($mil) | 1030 | 420 | 1863 | − 1279** | − 169** |
CAR [− 40; − 1] (MM) | − 0.01 | − 0.01 | 0.08 | − 0.01 | 0.00 |
CAR [− 40; − 1] (3F) | − 0.01 | − 0.01 | 0.08 | − 0.01 | 0.00 |
Asymmetric Information (Binary) | |||||
Cross-industry | 0.59 | 0.25*** | |||
Cross-border | 0.23 | 0.14*** | |||
Unlisted Target | 0.80 | 0.50*** | |||
Panel B: All-stock Financed M&A (N = 96) | |||||
Acquirers’ Overvaluation (N = 96) | |||||
EXVIA | − 0.28 | − 0.30 | 0.34 | ||
MBIA | 0.11 | − 0.04 | 0.70 | ||
MACRO | 0.09 | 0.11 | 0.19 | ||
MI – Overvaluation | 0.54 | 0.54 | 0.16 | ||
Acquirers’ Misvaluation (N = 96) | |||||
|EXVIA| | 0.37 | 0.34 | 0.24 | ||
|MBIA| | 0.57 | 0.45 | 0.43 | ||
MI – Mispricing | 0.46 | 0.46 | 0.14 | ||
Targets’ Overvaluation (N = 64) | |||||
EXVIA | − 0.71 | − 0.71 | 0.21 | ||
MBIA | 0.22 | 0.05 | 0.61 | ||
MACRO | 0.08 | 0.11 | 0.18 | ||
MI – Overvaluation | 0.45 | 0.47 | 0.19 | ||
Targets’ Misvaluation (N = 64) | |||||
|EXVIA| | 0.70 | 0.71 | 0.22 | ||
|MBIA| | 0.36 | 0.14 | 0.42 | ||
MI – Mispricing | 0.46 | 0.46 | 0.15 | ||
Acquirers’ Financials | |||||
Total Assets ($mil) | 13498 | 3749 | 28749 | ||
Dividend Payout ($mil) | 272 | 54 | 856 | ||
Leverage | 0.74 | 0.51 | 0.80 | ||
Collateral | 0.33 | 0.22 | 0.33 | ||
Return-on-equity | 0.13 | 0.11 | 0.17 | ||
Market-to-book | 1.88 | 1.33 | 1.53 | ||
Closely Held Shares | 13.83 | 5.54 | 18.92 | ||
Deal-related Features | |||||
Relative Deal Size | 0.36 | 0.34 | 0.22 | ||
Deal Value ($mil) | 2309 | 590 | 5481 | ||
CAR [− 40; − 1] (MM) | − 0.01 | 0.00 | 0.09 | ||
CAR [− 40; − 1] (3F) | − 0.01 | 0.00 | 0.09 | ||
Asymmetric Information (Binary) | |||||
Cross− industry | 0.34 | ||||
Cross-border | 0.10 | ||||
Unlisted Target | 0.29 | ||||
Panel C: Mixed Financed M&A (N = 208) | |||||
Acquirers’ Overvaluation (N = 208) | |||||
EXVIA | − 0.40 | − 0.46 | 0.39 | ||
MBIA | 0.35 | 0.21 | 0.84 | ||
MACRO | 0.06 | 0.10 | 0.19 | ||
MI – Overvaluation | 0.52 | 0.50 | 0.15 | ||
Acquirers’ Misvaluation (N = 208) | |||||
|EXVIA| | 0.49 | 0.48 | 0.29 | ||
|MBIA| | 0.62 | 0.43 | 0.66 | ||
MI – Mispricing | 0.47 | 0.47 | 0.15 | ||
Targets’ Overvaluation (N = 87) | |||||
EXVIA | − 0.76 | − 0.72 | 0.22 | ||
MBIA | 0.22 | 0.15 | 0.57 | ||
MACRO | 0.04 | 0.09 | 0.23 | ||
MI – Overvaluation | 0.51 | 0.51 | 0.15 | ||
Targets’ Misvaluation (N = 87) | |||||
|EXVIA| | 0.75 | 0.72 | 0.23 | ||
|MBIA| | 0.34 | 0.15 | 0.38 | ||
MI – Mispricing | 0.44 | 0.42 | 0.18 | ||
Acquirers’ Financials | |||||
Total Assets ($mil) | 19078 | 5343 | 37553 | ||
Dividend Payout ($mil) | 437 | 83 | 1130 | ||
Leverage | 0.78 | 0.58 | 1.14 | ||
Collateral | 0.34 | 0.22 | 0.32 | ||
Return-on-equity | 0.21 | 0.17 | 0.22 | ||
Market-to-book | 3.70 | 1.87 | 9.01 | ||
Closely Held Shares | 12.97 | 6.71 | 16.99 | ||
Deal-related Features | |||||
Relative Deal Size | 0.30 | 0.24 | 0.23 | ||
Deal Value ($mil) | 3043 | 900 | 6569 | ||
CAR [− 40; − 1] (MM) | − 0.01 | − 0.02 | 0.09 | ||
CAR [− 40; − 1] (3F) | 0.00 | − 0.01 | 0.09 | ||
Asymmetric Information (Binary) | |||||
Cross-industry | 0.53 | ||||
Cross-border | 0.12 | ||||
Unlisted Target | 0.59 |
3.3 Event study
4 Empirical results on payment methods
4.1 Targets’ rationality and M&A payment methods
Model (1) | Model (2) | Model (3) | Model (4) | |
---|---|---|---|---|
Acquirer/Target Status | ||||
Acquirer | − 0.164 | − 0.165 | − 0.157 | − 0.156 |
(− 1.610) | (− 1.619) | (− 1.562) | (− 1.562) | |
Opposite Party Advisor | ||||
Opp. Advisor | 1.115*** | 1.116*** | 1.113*** | 1.109*** |
(7.900) | (7.935) | (7.979) | (7.982) | |
Asymmetric Information | ||||
Cross-industry | − 0.286*** | − 0.279*** | − 0.168* | − 0.163* |
(2.785) | (2.736) | (1.691) | (1.650) | |
Cross-border | − 0.101 | − 0.106 | − 0.071 | − 0.078 |
(− 0.782) | (− 0.834) | (− 0.565) | (− 0.627) | |
Deal-related Information | ||||
(ln) Deal Value | 1.525*** | 1.529*** | 1.460*** | 1.468*** |
(13.671) | (13.867) | (13.522) | (13.744) | |
Year Fixed | Yes | No | Yes | No |
Industry Fixed | Yes | Yes | No | No |
Constant | − 5.847*** | − 5.905*** | − 5.723*** | − 5.840*** |
(− 14.615) | (− 16.942) | (− 15.306) | (− 18.382) | |
Observations | 2310 | 2310 | 2310 | 2310 |
Pseudo R2 | 0.152 | 0.153 | 0.133 | 0.134 |
Model (1) | Model (2) | Model (3) | Model (4) | |
---|---|---|---|---|
Acquirers’ Overvaluation | ||||
EXVIA | − 0.006 | |||
(− 0.044) | ||||
MBIA | 0.043 | |||
(0.474) | ||||
MACRO | 0.141 | |||
(0.411) | ||||
MI—Overvaluation | − 0.193 | |||
(− 0.561) | ||||
Asymmetric Information | ||||
Cross-industry | 0.241*** | 0.241*** | 0.239*** | 0.243*** |
(2.861) | (2.866) | (2.832) | (2.886) | |
Cross-border | 0.186 | 0.181 | 0.187 | 0.188 |
(1.577) | (1.530) | (1.580) | (1.589) | |
Unlisted Target | 0.723*** | 0.724*** | 0.722*** | 0.722*** |
(7.571) | (7.617) | (7.610) | (7.612) | |
Acquirers’ Financials | ||||
(ln) Tot. Ass | 0.345*** | 0.353*** | 0.343*** | 0.349*** |
(2.947) | (3.303) | (3.290) | (3.323) | |
Divd./Tot. Ass | 0.514 | 0.486 | 0.514 | 0.532 |
(1.085) | (1.030) | (1.092) | (1.125) | |
Leverage | 0.098 | 0.097 | 0.098 | 0.100 |
(1.098) | (1.092) | (1.105) | (1.120) | |
Collateral | 0.194 | 0.190 | 0.190 | 0.213 |
(1.178) | (1.192) | (1.189) | (1.301) | |
Return-on-equity | − 0.053 | − 0.063 | − 0.054 | − 0.046 |
(− 0.496) | (− 0.577) | (− 0.502) | (− 0.427) | |
Market-to-book | 0.007 | 0.005 | 0.007 | 0.008 |
(0.960) | (0.494) | (0.959) | (1.042) | |
Closely Held Shares | − 0.007*** | − 0.007*** | − 0.007*** | − 0.007*** |
(− 2.738) | (− 2.744) | (− 2.729) | (− 2.764) | |
Deal-related Features | ||||
Relative Deal Value | − 1.111*** | − 1.061*** | − 1.119*** | − 1.116*** |
(− 3.699) | (− 3.659) | (− 4.221) | (− 4.217) | |
(ln) Deal Value | − 0.504*** | − 0.515*** | − 0.502*** | − 0.505*** |
(− 3.952) | (− 4.161) | (− 4.167) | (− 4.181) | |
CAR [− 40; − 1] (MM) | − 0.695 | − 0.718 | − 0.700 | − 0.677 |
(− 1.517) | (− 1.559) | (− 1.530) | (− 1.474) | |
Year Fixed | Yes | Yes | Yes | Yes |
Industry Fixed | Yes | Yes | Yes | Yes |
Constant | − 0.779 | − 0.860 | − 0.721 | − 0.731 |
(− 0.768) | (− 0.950) | (− 0.818) | (− 0.831) | |
Sigma | 0.945*** | 0.945*** | 0.945*** | 0.945*** |
(16.629) | (16.628) | (16.629) | (16.629) | |
Observations | 1150 | 1150 | 1150 | 1150 |
Pseudo R2 | 0.255 | 0.255 | 0.255 | 0.255 |
Model (1) | Model (2) | Model (3) | Model (4) | Model (5) | |
---|---|---|---|---|---|
Acquirers’ Mispricing | |||||
|EXVIA| | 0.834*** | ||||
(4.664) | |||||
EXVIA2 | 0.785*** | ||||
(4.608) | |||||
|MBIA| | − 0.213 | ||||
(− 1.443) | |||||
MACRO | 0.146 | ||||
(0.420) | |||||
MI – Mispricing | 0.482** | ||||
(2.205) | |||||
Asymmetric Information | |||||
Cross-industry | 0.251*** | 0.281*** | 0.259*** | 0.266*** | 0.268*** |
(− 3.134) | (3.372) | (3.062) | (3.120) | (3.155) | |
Cross-border | 0.151 | 0.177 | 0.216* | 0.208* | 0.199* |
(1.266) | (1.516) | (1.811) | (1.742) | (1.666) | |
Unlisted Target | 0.711*** | 0.650*** | 0.661*** | 0.660*** | 0.665*** |
(7.713) | (7.054) | (7.060) | (7.026) | (7.080) | |
Acquirers’ Financials | |||||
(ln) Tot. Ass | 0.392*** | 0.379*** | 0.328*** | 0.347*** | 0.373*** |
(3.750) | (3.555) | (3.093) | (3.284) | (3.468) | |
Divd./Tot. Ass | 0.746** | − 0.098 | 0.650 | 0.468 | 0.472 |
(2.354) | (− 0.933) | (1.317) | (0.980) | (0.995) | |
Leverage | 0.097 | 0.669 | 0.092 | 0.082 | 0.076 |
(1.179) | (1.430) | (1.014) | (0.922) | (0.851) | |
Collateral | 0.380** | 0.075 | 0.212 | 0.191 | 0.209 |
(2.382) | (0.862) | (1.310) | (1.178) | (1.293) | |
Return-on-equity | − 0.103 | 0.354** | − 0.036 | − 0.049 | − 0.066 |
(− 1.080) | (2.196) | (− 0.333) | (− 0.455) | (− 0.608) | |
Market-to-book | 0.010 | 0.009 | 0.020* | 0.007 | 0.006 |
(1.550) | (1.140) | (1.910) | (0.941) | (0.739) | |
Closely Held Shares | − 0.008*** | − 0.009*** | − 0.008*** | − 0.008*** | − 0.008*** |
(− 3.166) | (− 3.335) | (− 2.760) | (− 2.744) | (− 2.853) | |
Deal Information | |||||
Relative Deal Value | − 1.053*** | − 1.096*** | − 1.159*** | − 1.116*** | − 1.044*** |
(− 4.247) | (− 4.083) | (− 4.308) | (− 4.167) | (− 3.851) | |
(ln) Deal Value | − 0.524*** | − 0.552*** | − 0.526*** | − 0.542*** | − 0.563*** |
(− 4.724) | (− 4.583) | (− 4.307) | (− 4.434) | (− 4.565) | |
CAR [− 40; − 1] (MM) | − 0.835* | − 0.782* | − 0.692 | − 0.698 | − 0.739 |
(− 1.813) | (− 1.731) | (− 1.494) | (− 1.507) | (− 1.595) | |
Year Fixed | Yes | Yes | Yes | Yes | Yes |
Industry Fixed | Yes | Yes | Yes | Yes | Yes |
Constant | − 1.397 | − 1.252 | − 0.427 | − 0.660 | − 1.103 |
(− 1.540) | (− 1.379) | (− 0.475) | (− 0.740) | (− 1.184) | |
Sigma | 0.923*** | 0.929*** | 0.954*** | 0.956*** | 0.955*** |
(16.321) | (16.660) | (16.618) | (16.613) | (16.618) | |
Observations | 1150 | 1150 | 1150 | 1150 | 1150 |
Pseudo R2 | 0.268 | 0.266 | 0.251 | 0.249 | 0.260 |
4.2 Acquirers’ rationality and M&A payment methods
Model (1) | Model (2) | Model (3) | Model (4) | Model (5) | Model (6) | |
---|---|---|---|---|---|---|
Targets’ Overvaluation | ||||||
EXVIA | − 0.420 | |||||
(− 0.907) | ||||||
MBIA | 0.041 | |||||
(1.171) | ||||||
MACRO | 0.153 | |||||
(0.317) | ||||||
MI—Overvaluation | − 0.000 | |||||
(− 0.000) | ||||||
Asymmetric Information | ||||||
Rel. EXVIA | − 0.384 | |||||
(− 1.672) | ||||||
Rel. MBIA | − 0.044 | |||||
(− 1.227) | ||||||
Cross-industry | 0.215 | 0.247* | 0.219 | 0.183 | 0.212 | 0.245* |
(1.571) | (1.793) | (1.589) | (1.353) | (1.544) | (1.782) | |
Cross-border | 0.582** | 0.565** | 0.577** | 0.540** | 0.533** | 0.570** |
(2.533) | (2.482) | (2.478) | (2.396) | (2.323) | (2.502) | |
Acquirers’ Financials | ||||||
(ln) Tot. Ass | 0.562*** | 0.573*** | 0.565*** | 0.603*** | 0.749*** | 0.562*** |
(2.724) | (2.754) | (2.716) | (2.918) | (3.067) | (2.713) | |
Divd./Tot. Ass | 3.108 | 2.739 | 3.042 | 2.861 | 3.173 | 2.599 |
(1.156) | (1.026) | (1.123) | (1.074) | (1.179) | (0.970) | |
Leverage | 0.313** | 0.309** | 0.329** | 0.327** | 0.368** | 0.309** |
(2.045) | (2.020) | (2.152) | (2.191) | (2.380) | (2.020) | |
Collateral | − 0.174 | − 0.212 | − 0.233 | − 0.242 | − 0.127 | − 0.216 |
(− 0.565) | (− 0.701) | (− 0.765) | (− 0.798) | (− 0.410) | (− 0.713) | |
Return-on-equity | 0.263 | 0.272 | 0.263 | 0.269 | 0.240 | 0.284 |
(1.495) | (1.542) | (1.487) | (1.557) | (1.360) | (1.604) | |
Market-to-book | − 0.007 | − 0.008 | − 0.007 | − 0.008 | − 0.004 | − 0.005 |
(− 0.674) | (− 0.712) | (− 0.653) | (− 0.726) | (− 0.397) | (− 0.487) | |
Closely Held Shares | − 0.002 | − 0.003 | − 0.002 | − 0.001 | − 0.001 | − 0.003 |
(− 0.435) | (− 0.597) | (− 0.348) | (− 0.185) | (− 0.243) | (− 0.605) | |
Deal Information | ||||||
Relative Deal Value | − 1.865*** | − 1.812*** | − 1.911*** | − 1.708*** | − 1.498** | − 1.865*** |
(− 3.463) | (− 3.353) | (− 3.547) | (− 3.187) | (− 2.559) | (− 3.483) | |
(ln) Deal Value | − 0.614*** | − 0.641*** | − 0.607*** | − 0.671*** | − 0.760*** | − 0.630*** |
(− 2.902) | (− 2.982) | (− 2.860) | (− 3.155) | (− 3.193) | (− 2.959) | |
CAR [− 40; − 1] | − 0.402 | − 0.482 | − 0.419 | − 0.386 | − 0.460 | − 0.458 |
(− 0.557) | (− 0.667) | (− 0.578) | (− 0.545) | (− 0.635) | (− 0.635) | |
Year Fixed | Yes | Yes | Yes | Yes | Yes | Yes |
Industry Fixed | Yes | Yes | Yes | Yes | Yes | Yes |
Constant | − 2.910* | − 2.728 | − 2.632 | − 2.871* | − 4.085** | − 2.620 |
(− 1.702) | (− 1.612) | (− 1.555) | (− 1.683) | (− 2.097) | (− 1.553) | |
Sigma | 0.867*** | 0.866*** | 0.870*** | 0.851*** | 0.867*** | 0.866*** |
(10.538) | (10.544) | (10.539) | (10.566) | (10.545) | (10.545) | |
Observations | 341 | 341 | 341 | 341 | 341 | 341 |
Pseudo R2 | 0.334 | 0.336 | 0.333 | 0.336 | 0.338 | 0.336 |
Model (1) | Model (2) | Model (3) | Model (4) | Model (5) | Model (6) | Model (7) | |
---|---|---|---|---|---|---|---|
Targets’ Mispricing | |||||||
|EXVIA| | 0.772* | ||||||
(1.957) | |||||||
EXVIA2 | 0.488* | ||||||
(1.736) | |||||||
|MBIA| | 0.169 | ||||||
(1.208) | |||||||
MACRO | 0.153 | ||||||
(0.317) | |||||||
MI – Mispricing | 0.716 | ||||||
(1.629) | |||||||
Asymmetric Information | |||||||
Rel. |EXVIA| | 1.185*** | ||||||
(4.541) | |||||||
Rel. |MBIA| | 0.086 | ||||||
(0.877) | |||||||
Cross-industry | 0.176 | 0.220 | 0.228* | 0.219 | 0.176 | 0.229* | 0.235* |
(− 1.351) | (1.617) | (1.669) | (1.589) | (1.369) | (1.773) | (1.714) | |
Cross-border | 0.576** | 0.596** | 0.574** | 0.577** | 0.603*** | 0.541** | 0.570** |
(2.444) | (2.589) | (2.508) | (2.478) | (2.730) | (2.464) | (2.494) | |
.Acquirers’ Financials | |||||||
(ln) Tot. Ass | 0.576*** | 0.560*** | 0.567*** | 0.565*** | 0.599*** | 0.700*** | 0.557*** |
(2.691) | (2.726) | (2.734) | (2.716) | (3.028) | (3.387) | (2.685) | |
Divd./Tot. Ass | 2.909 | 3.166 | 3.038 | 3.042 | 2.721 | 3.087 | 3.125 |
(1.377) | (1.186) | (1.134) | (1.123) | (1.065) | (1.246) | (1.155) | |
Leverage | 0.284* | 0.297* | 0.321** | 0.329** | 0.303** | 0.227 | 0.319** |
(1.830) | (1.950) | (2.112) | (2.152) | (2.109) | (1.573) | (2.093) | |
Collateral | − 0.143 | − 0.146 | − 0.242 | − 0.233 | − 0.244 | 0.182 | − 0.246 |
(− 0.418) | (− 0.478) | (− 0.800) | (− 0.765) | (− 0.846) | (0.612) | (− 0.810) | |
Return-on-equity | 0.256* | 0.266 | 0.266 | 0.263 | 0.243 | 0.258 | 0.254 |
(1.791) | (1.519) | (1.516) | (1.487) | (1.463) | (1.544) | (1.443) | |
Market-to-book | − 0.007 | − 0.007 | − 0.007 | − 0.007 | − 0.007 | − 0.001 | − 0.010 |
(− 0.729) | (− 0.680) | (− 0.677) | (− 0.653) | (− 0.702) | (− 0.114) | (− 0.899) | |
Closely Held Shares | − 0.001 | − 0.002 | − 0.001 | − 0.002 | 0.000 | − 0.005 | − 0.002 |
(− 0.229) | (− 0.426) | (− 0.297) | (− 0.348) | (0.037) | (− 1.179) | (− 0.402) | |
Deal Information | |||||||
Relative Deal Value | − 1.589** | − 1.827*** | − 1.822*** | − 1.911*** | − 1.577*** | − 1.353** | − 1.878*** |
(− 2.483) | (− 3.409) | (− 3.373) | (− 3.547) | (− 3.082) | (− 2.583) | (− 3.489) | |
(ln) Deal Value | − 0.658*** | − 0.619*** | − 0.615*** | − 0.607*** | − 0.657*** | − 0.708*** | − 0.611*** |
(− 2.994) | (− 2.937) | (− 2.901) | (− 2.860) | (− 3.242) | (− 3.407) | (− 2.877) | |
CAR [− 40; − 1] | − 0.279 | − 0.333 | − 0.455 | − 0.419 | − 0.339 | − 0.363 | − 0.411 |
(− 0.394) | (− 0.461) | (− 0.630) | (− 0.578) | (− 0.497) | (− 0.520) | (− 0.570) | |
Year Fixed | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Industry Fixed | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Constant | − 3.125* | − 2.821* | − 2.803* | − 2.632 | − 3.259** | − 5.167*** | − 2.724 |
(− 1.806) | (− 1.679) | (− 1.650) | (− 1.555) | (− 2.008) | (− 2.926) | (− 1.608) | |
Sigma | 0.823*** | 0.863*** | 0.867*** | 0.870*** | 0.825*** | 0.814*** | 0.868*** |
(10.979) | (10.544) | (10.543) | (10.539) | (10.858) | (10.607) | (10.541) | |
Observations | 341 | 341 | 341 | 341 | 341 | 341 | 341 |
Pseudo R2 | 0.337 | 0.337 | 0.336 | 0.333 | 0.337 | 0.368 | 0.334 |
4.3 Signal of payment methods for investors
Event Window | Cash (N = 851) | Stock (N = 96) | Mixed (N = 208) | All Transactions (N = 1155) | ||||
---|---|---|---|---|---|---|---|---|
Mean p value | Median p value | Mean p value | Median p value | Mean p value | Median p value | Mean p value | Median p value | |
Market Model | ||||||||
[–5; + 5] | 1.219 0.000*** | 0.696 0.000*** | 1.000 0.228 | − 0.137 0.719 | 2.550 0.001*** | 1.590 0.001*** | 1.441 0.000*** | 0.763 0.000*** |
[–1; + 1] | 1.198 0.000*** | 0.454 0.000*** | 0.436 0.546 | − 0.628 0.412 | 1.664 0.002*** | 0.944 0.004*** | 1.218 0.000*** | 0.480 0.000*** |
[–1; 0] | 0.637 0.000*** | 0.167 0.000*** | − 0.044 0.942 | − 0.811 0.137 | 0.406 0.349 | − 0.006 0.616 | 0.539 0.000*** | 0.119 0.003*** |
Fama–French Three-Factor Model | ||||||||
[–5; + 5] | 1.139 0.000*** | 1.139 0.000*** | 1.030 0.189 | − 0.181 0.623 | 2.530 0.001*** | 1.228 0.002*** | 1.380 0.000*** | 0.529 0.000*** |
[–1; + 1] | 1.168 0.000*** | 0.376 0.000*** | 0.384 0.582 | − 0.402 0.425 | 1.677 0.002*** | 0.781 0.003*** | 1.195 0.000*** | 0.380 0.000*** |
[–1; 0] | 0.609 0.000*** | 0.115 0.000*** | − 0.107 0.857 | − 0.589 0.145 | 0.394 0.349 | 0.182 0.513 | 0.511 0.000*** | 0.068 0.005*** |
CAR [− 1; 0] | CAR [− 1; + 1] | CAR [− 5; + 5] | |||||||
---|---|---|---|---|---|---|---|---|---|
Model (1) | Model (2) | Model (3) | Model (4) | Model (5) | Model (6) | Model (7) | Model (8) | Model (9) | |
Cash Payment (%) | 0.668*** | 0.672*** | 0.551** | 0.513** | 0.502** | 0.495** | 0.513** | 0.502** | 0.495** |
(3.083) | (3.054) | (2.388) | (2.527) | (2.423) | (2.216) | (2.527) | (2.423) | (2.216) | |
Asymmetric Information | |||||||||
Cross-industry | − 0.019 | − 0.035 | − 0.012 | 0.078 | 0.072 | 0.027 | 0.078 | 0.072 | 0.027 |
(0.168) | (0.313) | (0.105) | (− 0.709) | (− 0.644) | (− 0.234) | (− 0.709) | (− 0.644) | (− 0.234) | |
Cross-border | − 0.250* | − 0.234* | − 0.264** | − 0.060 | − 0.041 | − 0.071 | − 0.060 | − 0.041 | − 0.071 |
(− 1.903) | (− 1.772) | (− 1.979) | (− 0.483) | (− 0.325) | (− 0.557) | (− 0.483) | (− 0.325) | (− 0.557) | |
Unlisted Target | 0.430*** | 0.423*** | 0.442*** | 0.494*** | 0.493*** | 0.472*** | 0.494*** | 0.493*** | 0.472*** |
(3.106) | (2.995) | (3.151) | (3.606) | (3.540) | (3.403) | (3.606) | (3.540) | (3.403) | |
Acquirers’ Financials | |||||||||
(ln) Tot. Ass | − 0.177 | − 0.147 | − 0.117 | − 0.490*** | − 0.474*** | − 0.473*** | − 0.490*** | − 0.474*** | − 0.473*** |
(− 1.547) | (− 1.276) | (− 0.963) | (− 4.196) | (− 4.038) | (− 3.890) | (− 4.196) | (− 4.038) | (− 3.890) | |
Divd./Tot. Ass | 0.795 | 0.831 | 0.807 | − 0.254 | − 0.210 | − 0.188 | − 0.254 | − 0.210 | − 0.188 |
(1.384) | (1.491) | (1.380) | (− 0.285) | (− 0.242) | (− 0.212) | (− 0.285) | (− 0.242) | (− 0.212) | |
Leverage | − 0.173 | − 0.143 | − 0.186 | − 0.237 | − 0.225 | − 0.212 | − 0.237 | − 0.225 | − 0.212 |
(− 1.204) | (− 1.058) | (− 1.210) | (− 1.585) | (− 1.544) | (− 1.433) | (− 1.585) | (− 1.544) | (− 1.433) | |
Collateral | − 0.060 | − 0.025 | 0.039 | − 0.054 | − 0.032 | 0.096 | − 0.054 | − 0.032 | 0.096 |
(− 0.275) | (− 0.112) | (0.152) | (− 0.242) | (− 0.139) | (0.374) | (− 0.242) | (− 0.139) | (0.374) | |
Return-on-equity | − 0.180 | − 0.149 | − 0.213 | − 0.027 | − 0.000 | − 0.013 | − 0.027 | − 0.000 | − 0.013 |
(− 0.799) | (− 0.682) | (− 0.955) | (− 0.100) | (− 0.000) | (− 0.049) | (− 0.100) | (− 0.000) | (− 0.049) | |
Market-to-book | 0.020 | 0.018 | 0.021* | 0.013 | 0.011 | 0.013 | 0.013 | 0.011 | 0.013 |
(1.644) | (1.441) | (1.713) | (0.866) | (0.792) | (0.916) | (0.866) | (0.792) | (0.916) | |
Closely Held Shares | 0.002 | 0.003 | 0.002 | 0.003 | 0.004 | 0.004 | 0.003 | 0.004 | 0.004 |
(0.433) | (0.784) | (0.370) | (0.682) | (1.033) | (0.931) | (0.682) | (1.033) | (0.931) | |
Deal Information | |||||||||
Relative Deal Value | 0.872** | 0.887** | 1.077** | 0.477 | 0.440 | 0.418 | 0.477 | 0.440 | 0.418 |
(2.063) | (2.084) | (2.439) | (1.067) | (0.970) | (0.916) | (1.067) | (0.970) | (0.916) | |
(ln) Deal Value | − 0.087 | − 0.109 | − 0.181 | 0.209 | 0.211 | 0.189 | 0.209 | 0.211 | 0.189 |
(− 0.560) | (− 0.687) | (− 1.113) | (1.292) | (1.291) | (1.136) | (1.292) | (1.291) | (1.136) | |
Constant Cut 1 | − 2.243** | − 2.101* | − 1.858 | − 4.671*** | − 4.573*** | − 17.859*** | − 4.671*** | − 4.573*** | − 17.859*** |
(− 2.073) | (− 1.888) | (− 1.637) | (− 4.370) | (− 4.153) | (− 12.110) | (− 4.370) | (− 4.153) | (− 12.110) | |
Constant Cut 2 | − 1.099 | − 0.948 | − 0.705 | − 3.532*** | − 3.427*** | − 16.712*** | − 3.532*** | − 3.427*** | − 16.712*** |
(− 1.017) | (− 0.852) | (− 0.621) | (− 3.319) | (− 3.126) | (− 11.346) | (− 3.319) | (− 3.126) | (− 11.346) | |
Constant Cut 3 | 0.045 | 0.206 | 0.450 | − 2.368** | − 2.254** | − 15.535*** | − 2.368** | − 2.254** | − 15.535*** |
(0.042) | (0.185) | (0.396) | (− 2.232) | (− 2.062) | (− 10.588) | (− 2.232) | (− 2.062) | (− 10.588) | |
Year Fixed | No | Yes | No | No | Yes | No | No | Yes | No |
Industry Fixed | No | No | Yes | No | No | Yes | No | No | Yes |
Observations | 1150 | 1150 | 1150 | 1150 | 1150 | 1150 | 1150 | 1150 | 1150 |
Adjusted R2 | 0.017 | 0.021 | 0.021 | 0.022 | 0.026 | 0.027 | 0.022 | 0.026 | 0.027 |