סמינר במימון חשבונאות

Omri Even Tov , University of California, Berkeley

Using a unique hand-collected sample of 1,195 failed acquisition offers from 1979 to 2012, we investigate two research questions. The first focuses on whether it is the synergy hypothesis or

the information hypothesis that drives acquisition premiums, while the second focuses on whether a target’s rejection of an acquisition offer is consistent with rent extraction or incentive alignment

between management and shareholders. A key factor in addressing these two questions is to partition the sample into acquisition offers that fail due to the target’s rejection (rejection group) and those

that fail due to other reasons (other-reasons group). With respect to our first question, we find that the information hypothesis dominates in the rejection group, while the synergy hypothesis dominates

in the other-reasons group. With respect to our second question, our analyses focus on only the rejection group because unlike the other-reasons group, in the rejection group the CEO likely plays a key

role in the rejection decision. Therefore, this setting potentially has the largest conflict of interest between managers and shareholders. Using the rejection group, we test for the efficacy of different

corporate governance measures in facilitating managerial rent extraction or incentive alignment. We find that the existence of a poison pill provision and, to a lesser extent, CEO share ownership, exacerbate

managerial rent extraction. In contrast, we find that the existence of a staggered board and higher levels of CEO option ownership enhance incentive alignment.