CRIEFF Discussion Paper Number 0810
Value Ambiguity and Gains from Acquisitions of Unlisted Targets
Leonidas Barbopoulos, (University
of St.Andrews), Krishna Paudyal
(Durham Business School), Gioia Pescetto (University of Durham)
Abstract
This paper examines the announcement
period and the post acquisition gains of UK acquirers of unlisted targets that are
subject to value-ambiguity. The evidence shows that target’s age, size, intangibility
of assets, and investments can explain the variations in bidding firm’s abnormal
returns both in
the short- and in the long-run. The findings further show that the gains to bidding
firms acquiring unlisted targets are associated with the difficulty in valuing unlisted
targets and the means of payment used.
JEL codes: D81, D82, D83, G14, G34
Keywords:
mergers and acquisitions, abnormal returns, value-ambiguity, unlisted firms, method
of payment.
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