Measuring deal premiums in takeovers

Mulherin, Harold and Şimşir, Şerif Aziz (2014) Measuring deal premiums in takeovers. (Accepted/In Press)

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We investigate whether the merger announcement dates provided in the Securities Data Corporation (SDC) database are handled correctly by researchers performing event studies. We find that in 24.1% of deals, the popular choice of using the SDC’s “Date Announced” (DA) field as the event date leads to biased estimates of target firm abnormal returns because of earlier abnormal price movements due to merger-related events such as merger rumors or search-for-buyer types of announcements. We hand collect the merger-related events from news sources and make the complete dataset publicly available at the Financial Management website.
Item Type: Article
Uncontrolled Keywords: Mergers and Acquisitions, Event Study, Cumulative Abnormal Returns, Offer Premiums, Merger Rumors, Strategic Alternatives
Subjects: H Social Sciences > HG Finance > HG4001-4285 Financial management. Business finance. Corporation finance
Divisions: Sabancı Business School
Sabancı Business School > Accounting and Finance
Depositing User: Şerif Aziz Şimşir
Date Deposited: 09 Dec 2014 22:08
Last Modified: 26 Apr 2022 09:15

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