Initial Offer Precision and M&A Outcomes
Research output: Contribution to journal › Article › Scientific › peer-review
- Boston Consulting Group's Boston Office in Boston
Building on recent research in social psychology, this paper analyzes the link between the precision of initial cash offers and mergers and acquisition (M&A) outcomes. About one-half of the offers are made at the precision of one or five dollars per share, while an additional one-third are made at the precision of a half dollar or one quarter. The practice of making offers at round price-per-share levels is associated with a higher purchase price for target shares and a lower probability of deal completion.
|Early online date||10 Jul 2018|
|Publication status||Published - 2019|
|MoE publication type||A1 Journal article-refereed|