TY - JOUR
T1 - Asymmetric Information and Target Firm Returns
AU - Croci, Ettore
AU - Petmezas, Dimitris
AU - Travlos, Nickolaus
PY - 2011
Y1 - 2011
N2 - This paper examines the relationship between asymmetric information and target firm returns in M&As. We argue that if managers possess favourable (unfavourable) asymmetric information, they will offer, ceteris paribus, high (low) premium, affecting target firm returns accordingly. We propose several proxies of asymmetric information. The empirical evidence strongly supports our hypothesis as we find that target firm returns are significantly negatively related to asymmetric information regarding synergy gains. Our results are robust after controlling for several target and deal characteristics.
AB - This paper examines the relationship between asymmetric information and target firm returns in M&As. We argue that if managers possess favourable (unfavourable) asymmetric information, they will offer, ceteris paribus, high (low) premium, affecting target firm returns accordingly. We propose several proxies of asymmetric information. The empirical evidence strongly supports our hypothesis as we find that target firm returns are significantly negatively related to asymmetric information regarding synergy gains. Our results are robust after controlling for several target and deal characteristics.
KW - Asymmetric Information
KW - Mergers and Acquisitions
KW - Target Firm Announcement Returns
KW - Asymmetric Information
KW - Mergers and Acquisitions
KW - Target Firm Announcement Returns
UR - http://hdl.handle.net/10807/9734
UR - http://www.tandfonline.com/doi/abs/10.1080/1351847x.2011.599850
U2 - 10.1080/1351847X.2011.599850
DO - 10.1080/1351847X.2011.599850
M3 - Article
SN - 1351-847X
VL - 2011
SP - N/A-N/A
JO - European Journal of Finance
JF - European Journal of Finance
ER -