Abstract
Using a sample of mergers & acquisitions and hedge-fund holdings from 1995 to 2009, we find that pre-merger hedge-fund holdings in target firms increase proportion of payment made in cash, but not the premium. In the presence of hedge-fund holdings, higher unexpected cash payment leads to a higher likelihood of deal completion, shortens deal duration, but has no effects on premium. At the same time, target firms held by high-turnover hedge funds are more likely to accept bidders' overvalued equity. Overall, hedge funds holding target firms shape merger payment in ways that do not necessarily benefit target firms' long-term shareholders.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
