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M&A deal initiation and managerial motivation
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Fidrmuc, Jana P. and Xia, Chunling (2019) M&A deal initiation and managerial motivation. Journal of Corporate Finance, 59 . pp. 320-343. doi:10.1016/j.jcorpfin.2017.01.010 ISSN 0929-1199.
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Official URL: https://doi.org/10.1016/j.jcorpfin.2017.01.010
Abstract
This paper contributes to our understanding of managers' motivations for initiating the sale of their company. Using a sample of 1098 publicly-listed US target firms with completed deals, we show that deals initiated by the target firm rather than by outside bidders have higher CEO ownership. Furthermore, CEOs are motivated to offer their firms for sale also by higher golden parachutes, stock and stock option grants prior to takeovers. Our results suggest that motivated CEOs participate actively in deal negotiations, rather than being bribed not to resist the deal. In target-initiated deal firms, CEO ownership and equity grants are also positively correlated with takeover premiums.
| Item Type: | Journal Article | ||||||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management | ||||||||
| Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
| Library of Congress Subject Headings (LCSH): | Consolidation and merger of corporations., Industrial management., Compensation management., Chief executive officers., Corporations -- Finance., Macroeconomics. | ||||||||
| Journal or Publication Title: | Journal of Corporate Finance | ||||||||
| Publisher: | Elsevier Science BV | ||||||||
| ISSN: | 0929-1199 | ||||||||
| Official Date: | December 2019 | ||||||||
| Dates: |
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| Volume: | 59 | ||||||||
| Page Range: | pp. 320-343 | ||||||||
| DOI: | 10.1016/j.jcorpfin.2017.01.010 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Date of first compliant deposit: | 30 January 2017 | ||||||||
| Date of first compliant Open Access: | 4 September 2018 |
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