Is stock liquidity transferred and upgraded in acquisitions? Evidence from liquidity synergies in US freeze-outs
Abstract
This paper investigates the value successful bidders generate from acquiring less liquid targets. This synergy is traced with both theoretical and empirical evidence from the squeeze-out stage of going private transactions, when bidders hold sizeable toeholds in target shares. By transferring their superior liquidity, acquirers can add value to the valuation of their toeholds in fully acquired target assets. We use a sample of US delisted...
Paper Details
Title
Is stock liquidity transferred and upgraded in acquisitions? Evidence from liquidity synergies in US freeze-outs
Published Date
May 12, 2018
Volume
282
Issue
1-2
Pages
179 - 216
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