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Merger Motivated Ipos
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Book Synopsis Merger-Motivated IPOs by : Armen Hovakimian
Download or read book Merger-Motivated IPOs written by Armen Hovakimian and published by . This book was released on 2009 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we explore and find support for IPOs motivated by subsequent acquisition activity. Over a third of newly public firms enter the market for corporate control as acquirers within three years of the IPO. We find that the role of an IPO in facilitating subsequent acquisitions is twofold. Newly-public firms benefit from the cash funding provided by the IPO, subsequent access to public financing and publicly traded stock, which facilitates stock-based acquisitions. IPO firms also benefit from obtaining public valuations. We find that these firms take advantage of high-post IPO stock values in making stock-based acquisitions at favorable terms and obtain market feedback.
Book Synopsis Information Revelation by : Pamela E. Queen
Download or read book Information Revelation written by Pamela E. Queen and published by . This book was released on 2015 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many investment decisions of firms are hampered with uncertainty, especially decisions involving equity issuance and merger and acquisition (M&A) activity. For initial public offerings (IPOs), this uncertainty is about valuation of shares; for M&As, this uncertainty is about synergistic gains. The underlying cause of the uncertainty is asymmetric information problems among insiders and potential investors. Hsieh, Lyandres, and Zhdanov (2011) propose a merger-driven theory of IPOs in which a 2-stage process is used to eliminate valuation uncertainty. The first-stage, an IPO reveals information and therefore the subsequent second-stage merger yields better benefits. This paper explores this premise by examining the acquisition attitude, acquisition status, long-term return performance, and elapse time between IPO date and date of subsequent M&A. The expectation is the first-stage IPO reveals information which results in better evaluation of the targeted IPOs. Consequently, the second-stage M&As are more efficient and yield positive benefits. For this study, the research question is whether a strategy of 2-stage mergers differs when asymmetric information and levels of uncertainty about an IPO's value change. The results indicate with the enactment of recent regulatory actions to increase information disclosure, a merger-driven theory of IPOs is less likely.
Book Synopsis Reverse Mergers by : David N. Feldman
Download or read book Reverse Mergers written by David N. Feldman and published by John Wiley & Sons. This book was released on 2010-05-20 with total page 305 pages. Available in PDF, EPUB and Kindle. Book excerpt: In good markets or bad, reverse mergers play a key role for companies that want to avoid the IPO route for going public. Since the successful first edition of Reverse Mergers was published in 2006, the economic and regulatory landscape has changed. Executives, owners, lawyers, accountants, professional investors, regulators, and others need to know what those changes mean for reverse mergers. Reverse-merger expert David Feldman gives an overview of the most important changes since the previous edition was published: new SEC regulations, the changing nature of SPACs (Special-Purpose Acquisition Company), and the emergence of new instruments called WRASPs (WestPark Alternative Senior Exchange Process). The book includes a new chapter on China, and the “Experts Speak” chapter features all new interviewees. David Feldman is one of the country’s leading experts on reverse mergers, self-filings, and other alternatives to IPOs. His firm has guided hundreds of companies on going public, advising them on structure and mechanics, financing, due diligence, regulatory issues, and more.
Book Synopsis A Theory of Merger-Driven IPOs by : Evgeny Lyandres
Download or read book A Theory of Merger-Driven IPOs written by Evgeny Lyandres and published by . This book was released on 2013 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: We propose a model that links a firm's decision to go public with its subsequent takeover strategy. A private bidder does not know its true valuation, which affects its gain from a potential takeover. Consequently, a private bidder pursues suboptimal restructuring policy. An alternative route is to complete an initial public offering first. An IPO reduces valuation uncertainty, leading to more efficient acquisition strategy, therefore enhancing firm value. We calibrate the model using data on IPOs and Mamp;As. The resulting comparative statics generate several novel qualitative and quantitative predictions, which complement the predictions of other theories linking IPOs and Mamp;As. For example, the time it takes a newly public firm to attempt an acquisition of another firm is expected to increase in the degree of valuation uncertainty prior to the firm's IPO and it is expected to decrease in the valuation surprise realized at the time of the IPO. We test these and other empirical predictions of the model and find strong support for them.
Book Synopsis The Oxford Handbook of IPOs by : Douglas Cumming
Download or read book The Oxford Handbook of IPOs written by Douglas Cumming and published by . This book was released on 2018 with total page 841 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a comprehensive analysis of IPOs. The chapters cover the latest information on a range of fundamental questions, including: How are IPOs regulated? How are IPOs valued? How well does an IPO perform in the short and long run, and what are the drivers of performance?
Download or read book Mergers and IPOS written by Gisung Moon and published by . This book was released on 2003 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt: Exploiting the unique nature of roll-ups, a relatively new kind of transaction that combines IPOs and mergers, this paper contributes to the corporate finance literature in three major areas. First, I investigate the effects of a simultaneous merger on the pricing mechanism of the IPO market. By comparing roll-ups with traditional IPOs, this paper analyzes the effects of multiple business combinations on the underpricing and uncertainty of an IPO. In addition, I examine the effects of the contractual arrangements regarding the acquisition terms on the IPO underpricing in the framework of Leland and Pyle (1977). I also test the adverse selection hypothesis of Rock (1986) and Beatty and Ritter (1986) in IPO underpricing. Since roll-ups are expected to have greater informational asymmetry than traditional IPOs, this paper examines a unique sample of IPOs that are expected to have less informational asymmetry. Second, this study documents new empirical evidence on the long-term performance of roll-ups using more recently proposed methodologies of Lyon, Barber and Tsai (1999), Mitchell and Stafford (2000), and Eckbo, Masulis and Norli (2000). These new methodologies directly address common statistical problems in previous long-term performance studies. In addition, I address the effect of simultaneous merger on IPO long-term performance. Controlling for the IPO effect, I document unique evidence of long-term consequences attributable to the business combination that are very different from traditional merger/acquisitions. This paper also investigates the relations between various aspects of roll-up contracts and their subsequent performance over the long-run. Third, this study examines the nature and roles of sponsors in roll-up transactions and their effects on IPO underpricing and long-term performance. Roll-up sponsors play significant roles in creating new public companies and continue to engage in operating the companies after the IPO. These sponsor involvements are unique to roll-ups, and requires different treatment in studying IPO underpricing and the long-term performance.
Download or read book Merger Arbitrage written by Lionel Melka and published by John Wiley & Sons. This book was released on 2014-02-03 with total page 325 pages. Available in PDF, EPUB and Kindle. Book excerpt: A wave of corporate mergers, acquisitions, restructuring, and similar transactions has created unprecedented opportunities for those versed in contemporary risk arbitrage techniques. At the same time, the nature of the merger wave has lent such transactions a much higher degree of predictability than ever before, making risk arbitrage more attractive to investors. Surprisingly, there is little transparency and instruction for investors interested in learning the latest risk arbitrage techniques. Merger Arbitrage – A Fundamental Approach to Event-Driven Investing helps readers understand the inner workings of the strategy and hedge funds which engaged in this investment strategy. Merger arbitrage is one of the most commonly used strategies but paradoxically one of the least known. This book puts it in the spotlight and explains how fund managers are able to benefit from mergers and acquisitions. It describes how to implement this strategy, located at the crossroad of corporate finance and asset management, and where its risks lie through numerous topical examples. The book is split into three parts. The first part, examining the basis of merger arbitrage, looks at the key role of the market in takeover bids. It also assesses the major changes in the financial markets over recent years and their impact on M&A. Various M&A risk and return factors are also discussed, alongside the historical profitability of merger arbitrage, the different approaches used by fund managers and the results of academic studies on the subject. The second part of the book deals with the risk of an M&A transaction failing in terms of financing risk, competition issues, the legal aspects of merger agreements and administrative and political risks. The third part of the book examines specificities of M&A transactions, comprehensively covering hostile takeovers and leveraged buyouts. Each part contains many recent examples and case studies in order to show how the various theories and notions are put into practice. From researching prospects and determining positions, to hedging and trading tactics, Lionel Melka and Amit Shabi present the full complement of sophisticated risk arbitrage techniques, making Merger Arbitrage a must read for finance and investment professionals who want to take advantage of the nearly limitless opportunities afforded by today’s rapidly changing global business environment. The book builds on its authors’ diverse backgrounds and common experience managing a merger arbitrage fund, providing readers with an enriching inside view on M&A operations. Translated by Andrew Fanko and Frances Thomas
Book Synopsis Can Investors Anticipate Post-IPO Mergers and Acquisitions? by : Christopher W. Anderson
Download or read book Can Investors Anticipate Post-IPO Mergers and Acquisitions? written by Christopher W. Anderson and published by . This book was released on 2017 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Given the frequency and its important value implication of post-IPO M&A activity, we investigate empirically whether investors can utilize information based on IPO deal structure to predict merger and acquisition activity among newly public firms. Consistent with the hypothesis that some firms conduct IPOs to facilitate future M&A activity, we find that whether a newly public firm subsequently becomes a bidder or target is predicted by aspects of IPO deal structure. These characteristics include underwriter quality, promotional activity, pricing, proceeds, ownership structure, and issuance activity suggestive of market timing. Investors appear to rely on these observable aspects of a firm's going public process to anticipate the implications of M&A activity for security valuation. Specifically, when newly public firms with IPO deal structures predictive of acquisition activity announce an acquisition their stock returns are indistinguishable from zero. In contrast, abnormal returns to acquisition announcements by unlikely or surprise bidders are positive on average. These results suggest that the going public process has important implications for future M&A activity and valuation.
Book Synopsis Dual Track vs. IPO by : Michala Rudorfer
Download or read book Dual Track vs. IPO written by Michala Rudorfer and published by GRIN Verlag. This book was released on 2009-04-09 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2006 in the subject Business economics - Investment and Finance, grade: 1,7, European Business School - International University Schloß Reichartshausen Oestrich-Winkel, course: Seminar in Finance & Banking, language: English, abstract: This paper analyzes “dual tracking”, a useful marketing tool to increase the valuation of a private company. In line with this paper, dual tracking only refers to the choice between M&A and IPO in later stages of the selling process. In spite of an increasing number of major dual tracks, the idea is still widely unknown. In particular the scholastic world has rarely picked up this subject. This lack of academic research motivates to explore the concept in more detail. Thereby, the focus lies on the choice between M&A and IPO and on the interaction between the equity market and the M&A market. In this context, the key question is how the capital market reacts to an acquisition of a dual tracking firm.
Book Synopsis Liquidity and Asset Prices by : Yakov Amihud
Download or read book Liquidity and Asset Prices written by Yakov Amihud and published by Now Publishers Inc. This book was released on 2006 with total page 109 pages. Available in PDF, EPUB and Kindle. Book excerpt: Liquidity and Asset Prices reviews the literature that studies the relationship between liquidity and asset prices. The authors review the theoretical literature that predicts how liquidity affects a security's required return and discuss the empirical connection between the two. Liquidity and Asset Prices surveys the theory of liquidity-based asset pricing followed by the empirical evidence. The theory section proceeds from basic models with exogenous holding periods to those that incorporate additional elements of risk and endogenous holding periods. The empirical section reviews the evidence on the liquidity premium for stocks, bonds, and other financial assets.
Book Synopsis The Oxford Handbook of Entrepreneurial Finance by : Douglas Cumming
Download or read book The Oxford Handbook of Entrepreneurial Finance written by Douglas Cumming and published by OUP USA. This book was released on 2012-03-22 with total page 937 pages. Available in PDF, EPUB and Kindle. Book excerpt: Provides a comprehensive picture of issues dealing with different sources of entrepreneurial finance and different issues with financing entrepreneurs. The Handbook comprises contributions from 48 authors based in 12 different countries.
Book Synopsis M&A Synergies and Trends in IPOs by : Andrea Signori
Download or read book M&A Synergies and Trends in IPOs written by Andrea Signori and published by . This book was released on 2016 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent decline in IPO activity can be explained by the small firms' increasing preference for being acquired rather than growing independently. This paper sheds light on this explanation by focusing on the nature of the firms facing this decision and their potential merger synergies. First, the above explanation should be particularly true for Young Innovative Companies (YICs), which are often superior to incumbents in originating innovations but face greater difficulties in bringing them to the market. Second, a firm's trade-off between being acquired and remaining independent strongly depends on the extent of the synergies arising from a potential merger, which are however difficult to assess ex-ante. Using a new, text-based measure of business similarity as a proxy for M&A synergies, we document that YICs facing the potential to develop larger synergies are the main responsible for the decline in IPOs. Compared to 15 years ago, the quarterly number of IPOs conducted by these firms has decreased by 20. At the same time, while M&A activity of other firms has declined, the number of acquisitions involving this particular type of firms has remained stable over time.
Book Synopsis Mergers, Acquisitions, and Corporate Restructurings by : Patrick A. Gaughan
Download or read book Mergers, Acquisitions, and Corporate Restructurings written by Patrick A. Gaughan and published by John Wiley & Sons. This book was released on 2017-11-27 with total page 819 pages. Available in PDF, EPUB and Kindle. Book excerpt: The essential M&A primer, updated with the latest research and statistics Mergers, Acquisitions, and Corporate Restructurings provides a comprehensive look at the field's growth and development, and places M&As in realistic context amidst changing trends, legislation, and global perspectives. All-inclusive coverage merges expert discussion with extensive graphs, research, and case studies to show how M&As can be used successfully, how each form works, and how they are governed by the laws of major countries. Strategies and motives are carefully analyzed alongside legalities each step of the way, and specific techniques are dissected to provide deep insight into real-world operations. This new seventh edition has been revised to improve clarity and approachability, and features the latest research and data to provide the most accurate assessment of the current M&A landscape. Ancillary materials include PowerPoint slides, a sample syllabus, and a test bank to facilitate training and streamline comprehension. As the global economy slows, merger and acquisition activity is expected to increase. This book provides an M&A primer for business executives and financial managers seeking a deeper understanding of how corporate restructuring can work for their companies. Understand the many forms of M&As, and the laws that govern them Learn the offensive and defensive techniques used during hostile acquisitions Delve into the strategies and motives that inspire M&As Access the latest data, research, and case studies on private equity, ethics, corporate governance, and more From large megadeals to various forms of downsizing, a full range of restructuring practices are currently being used to revitalize and supercharge companies around the world. Mergers, Acquisitions, and Corporate Restructurings is an essential resource for executives needing to quickly get up to date to plan their own company's next moves.
Book Synopsis The Dual Tracking Puzzle by : Qin Lian
Download or read book The Dual Tracking Puzzle written by Qin Lian and published by . This book was released on 2008 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine a sample of 132 dual tracking targets - private firms entertaining acquisition offers at the same time as preparing for initial public offerings (IPOs) and eventually withdrawing their IPOs to be acquired after spending considerable time, money, and effort preparing for IPOs. We find that dual tracking private targets sell at a 58 percent acquisition premium relative to comparable private targets that never file IPO registrations, while their acquirers still earn a substantial average abnormal announcement return of 2.6 percent. Controlling for endogeneity effects does not change our results. The significant acquisition premium is due to neither dual tracking targets' improved bargaining power in negotiations nor higher potential synergy benefits for bidders. The premium is more consistent with the explanation that dual tracking private targets can signal their valuation to bidders and reduce valuation uncertainty by filing IPO registrations.
Book Synopsis Mergers and Acquisitions as the Pillar of Foreign Direct Investment by : A. Bitzenis
Download or read book Mergers and Acquisitions as the Pillar of Foreign Direct Investment written by A. Bitzenis and published by Palgrave Macmillan. This book was released on 2012-07-26 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This comprehensive volume tackles all aspects of Mergers and Acquisitions activity - including regional concentration of M&As at a global level, the impact of the economic crisis, and theoretical concepts and practical applications.
Book Synopsis Empirical Asset Pricing by : Turan G. Bali
Download or read book Empirical Asset Pricing written by Turan G. Bali and published by John Wiley & Sons. This book was released on 2016-02-26 with total page 512 pages. Available in PDF, EPUB and Kindle. Book excerpt: “Bali, Engle, and Murray have produced a highly accessible introduction to the techniques and evidence of modern empirical asset pricing. This book should be read and absorbed by every serious student of the field, academic and professional.” Eugene Fama, Robert R. McCormick Distinguished Service Professor of Finance, University of Chicago and 2013 Nobel Laureate in Economic Sciences “The empirical analysis of the cross-section of stock returns is a monumental achievement of half a century of finance research. Both the established facts and the methods used to discover them have subtle complexities that can mislead casual observers and novice researchers. Bali, Engle, and Murray’s clear and careful guide to these issues provides a firm foundation for future discoveries.” John Campbell, Morton L. and Carole S. Olshan Professor of Economics, Harvard University “Bali, Engle, and Murray provide clear and accessible descriptions of many of the most important empirical techniques and results in asset pricing.” Kenneth R. French, Roth Family Distinguished Professor of Finance, Tuck School of Business, Dartmouth College “This exciting new book presents a thorough review of what we know about the cross-section of stock returns. Given its comprehensive nature, systematic approach, and easy-to-understand language, the book is a valuable resource for any introductory PhD class in empirical asset pricing.” Lubos Pastor, Charles P. McQuaid Professor of Finance, University of Chicago Empirical Asset Pricing: The Cross Section of Stock Returns is a comprehensive overview of the most important findings of empirical asset pricing research. The book begins with thorough expositions of the most prevalent econometric techniques with in-depth discussions of the implementation and interpretation of results illustrated through detailed examples. The second half of the book applies these techniques to demonstrate the most salient patterns observed in stock returns. The phenomena documented form the basis for a range of investment strategies as well as the foundations of contemporary empirical asset pricing research. Empirical Asset Pricing: The Cross Section of Stock Returns also includes: Discussions on the driving forces behind the patterns observed in the stock market An extensive set of results that serve as a reference for practitioners and academics alike Numerous references to both contemporary and foundational research articles Empirical Asset Pricing: The Cross Section of Stock Returns is an ideal textbook for graduate-level courses in asset pricing and portfolio management. The book is also an indispensable reference for researchers and practitioners in finance and economics. Turan G. Bali, PhD, is the Robert Parker Chair Professor of Finance in the McDonough School of Business at Georgetown University. The recipient of the 2014 Jack Treynor prize, he is the coauthor of Mathematical Methods for Finance: Tools for Asset and Risk Management, also published by Wiley. Robert F. Engle, PhD, is the Michael Armellino Professor of Finance in the Stern School of Business at New York University. He is the 2003 Nobel Laureate in Economic Sciences, Director of the New York University Stern Volatility Institute, and co-founding President of the Society for Financial Econometrics. Scott Murray, PhD, is an Assistant Professor in the Department of Finance in the J. Mack Robinson College of Business at Georgia State University. He is the recipient of the 2014 Jack Treynor prize.
Book Synopsis Takeover Laws and Financial Development by : Tatiana Nenova
Download or read book Takeover Laws and Financial Development written by Tatiana Nenova and published by World Bank Publications. This book was released on 2006 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: The issue of "an appropriate" legal framework, especially in the case of the takeover market, has been poorly studied in the case of emerging markets, yet it is of immediate relevance and practical policymaker interest. The study makes a first attempt to analyze takeover regulations in a comparative context across 50 countries. It proposes a methodology to create a detailed index on the most salient features of capital market laws, and illustrates the approach on the case of takeover legislation. The methodology allows better understanding of the impact of laws on markets and development, allows a detailed quantification of a given regulation, in this case takeover market rules, and helps determine relevant policy implications. Specifically, the framework permits the exploration of the effects of individual regulations, their substitutability and interplay, as well as the overall extent of friendliness of the laws to investors, or particular groups thereof (such as minority shareholders), and the links of specialized regulation with the overall legal system. Finally, the study explores the effect of the investor-friendliness of takeover laws on stock market development.
