Managerial Motives and Merger Financing

Financial Review - Tập 35 Số 4 - Trang 139-152 - 2000
Saeyoung Chang1, Eric L. Mais2
1University of Nevada, Las Vegas
2University of Hawaii at Manoa

Tóm tắt

AbstractWe examine how managerial motives influence the choice of financing for a sample of 209 completed mergers from 1981–1988. Our evidence indicates that bidding firm management is more likely to finance mergers with cash when target firm ownership concentration is high, preventing the creation of an outside blockholder. This suggests bidding firm managers prefer to keep ownership structure widely diffused to reduce external monitoring. We also find that bidding firm management is more likely to finance mergers with stock when the variance of bidding firm's stock return is high. This suggests managers of risky firms prefer leverage‐reducing transactions to reduce their personal risk.

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Thông tin xuất bản

Financial Review

Tập 35 Số 4

139-152

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