Initial Offer Precision and M&A Outcomes

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Initial Offer Precision and M&A Outcomes. / Hukkanen, Petri; Keloharju, Matti.

In: Financial Management, Vol. 48, No. 1, 2019, p. 291-310.

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Hukkanen, Petri ; Keloharju, Matti. / Initial Offer Precision and M&A Outcomes. In: Financial Management. 2019 ; Vol. 48, No. 1. pp. 291-310.

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@article{9af1e84d045343158c4d5c2cf3cf5573,
title = "Initial Offer Precision and M&A Outcomes",
abstract = "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.",
author = "Petri Hukkanen and Matti Keloharju",
year = "2019",
doi = "10.1111/fima.12229",
language = "English",
volume = "48",
pages = "291--310",
journal = "Financial Management",
issn = "0046-3892",
publisher = "John Wiley and Sons Inc.",
number = "1",

}

RIS - Download

TY - JOUR

T1 - Initial Offer Precision and M&A Outcomes

AU - Hukkanen, Petri

AU - Keloharju, Matti

PY - 2019

Y1 - 2019

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=85050676333&partnerID=8YFLogxK

U2 - 10.1111/fima.12229

DO - 10.1111/fima.12229

M3 - Article

VL - 48

SP - 291

EP - 310

JO - Financial Management

JF - Financial Management

SN - 0046-3892

IS - 1

ER -

ID: 27001221