Are Stock-for-Stock Acquirers of Unlisted Targets Really Less Overvalued?

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7 Scopus citations


Extant studies assume that targets' private ownership mitigates acquirers' incentives and opportunities to finance acquisitions with inflated stocks. This view stems from the observation that, although the average stock-for-stock acquirer's merger announcement return is negative when the target is listed, it is positive when the target is unlisted. Accordingly, extant studies often suggest that announcements of stock-for-stock acquisitions of unlisted targets convey favorable private information about the acquirers. However, an analysis of stock-for-stock acquirers' stock performance, abnormal accruals, net operating assets, and insider trading suggests the opposite. Acquirers of unlisted targets are generally more overvalued than acquirers of listed targets.

Original languageEnglish (US)
Pages (from-to)901-929
Number of pages29
JournalFinancial Management
Issue number4
StatePublished - Dec 2013

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


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