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

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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
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:	Date Event December 2019 Published 4 February 2017 Available 28 January 2017 Accepted
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

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