Decoupling in the Financial Markets_August9_2013_Final.pdf (508.81 kB)
Decoupling by clienteles and by time in the financial markets: the case of two-stage stock-financed mergers
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posted on 2023-06-10, 02:41 authored by James S Ang, Gonal ColakGonal Colak, Tai-Wei ZhangA two-stage stock-financed merger occurs when an acquiring firm first issues shares, and then engages in a cash acquisition shortly afterward. Such deals allow us to test two important hypotheses derived from decoupling: by clienteles via segmentation and by time. The acquirer's value is maximized by selling shares to investors preferring to hold them, and use the raised cash to pay the target shareholders (the decoupling by clienteles hypothesis). Two-stage deals also provide an option to the acquirers by allowing them to decouple their own shares from the correlated target's shares by issuing at an earlier date and wait for good acquisition opportunities (the time decoupling hypothesis). We find empirical evidence in support of both hypotheses.
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Publication status
- Published
File Version
- Accepted version
Journal
Journal of Corporate FinanceISSN
0929-1199Publisher
ElsevierExternal DOI
Volume
25Page range
360-375Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2022-02-22First Open Access (FOA) Date
2022-02-22First Compliant Deposit (FCD) Date
2022-02-21Usage metrics
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