Does the Management's Forecast of Merger Synergies Explain the Premium Paid, the Method of Payment, and Merger Motives?
研究了336个并购案例中管理层对协同效应的估计对保留价格和支付方式的影响，发现协同效应不能解释溢价，可能用于诱导股东支持交易，且过度支付会导致股东财富损失。
I study a sample of 336 mergers and acquisitions (M&A) deals to investigate the effect of managements’ estimate of synergy on the reservation price and the payment method. I find that synergy does not explain the premium paid implying that it may have been announced to induce shareholders to endorse the deal. Acquiring firms are more likely to overpay if they have low growth potential, while the target firm is large, has higher premerger operating performance, and high growth potential. Acquirers may be serving their own self‐interests as they are more likely to exceed their reservation price if they receive low compensation and if entrenchment provisions are in place. I also find that these acquisitions lead to postmerger shareholders’ wealth destruction, which is more pronounced when acquirers overpay. I document that the greater the synergy and the acquirer firm‐specific overvaluation, the higher the likelihood of settling the deal with more shares.