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Learning from Market Feedback: Evidence from Mergers & Acquisitions

Rajamani, Anjana (2013) Learning from Market Feedback: Evidence from Mergers & Acquisitions. Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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Targets of merger deals experience signficant value increases in the days leading up to the announcement of a deal. Existing literature attributes the run up in target value solely to deal anticipation and, as such, the run-up is regarded as being uninformative about the surplus that can be generated from the deal. I find empirical evidence that target runup is positively related to bidder gain and to deal completion probability and that these results are strongest when the level of uncertainty regarding deal surplus is high. The results suggest that target runup reflects the market consensus about the deal surplus
and that this independent outside signal of deal surplus allows bidder insiders to update their priors and improve their decision making in regards to the deal. These results add to our understanding of managerial learning from the market and the role of the market in determining the outcome of privately negotiated deals.


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Item Type: University of Pittsburgh ETD
Status: Unpublished
CreatorsEmailPitt UsernameORCID
Rajamani, Anjana
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Denis, Diane
Schlingemann, Frederik-Paul
Moeller, Sara
Bargeron, Leonce
Date: 1 October 2013
Date Type: Publication
Defense Date: 9 May 2013
Approval Date: 1 October 2013
Submission Date: 1 October 2013
Access Restriction: No restriction; Release the ETD for access worldwide immediately.
Number of Pages: 102
Institution: University of Pittsburgh
Schools and Programs: Joseph M. Katz Graduate School of Business > Business Administration
Degree: PhD - Doctor of Philosophy
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: Mergers Acquisitions Market Feedback Markup Pricing
Date Deposited: 01 Oct 2013 15:35
Last Modified: 13 Mar 2019 17:36


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