Initial Offer Precision and M&A Outcomes

Research output: Contribution to journalArticleScientificpeer-review


Research units

  • 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.


Original languageEnglish
Pages (from-to)291-310
JournalFinancial Management
Issue number1
Early online date10 Jul 2018
Publication statusPublished - 2019
MoE publication typeA1 Journal article-refereed

ID: 27001221