Newly listed firms are increasingly active in mergers and acquisitions (M&As). The “stock as currency” motivation explains why firms engage in stock-financed acquisitions after their Initial Public Offering (IPO). We extend its implications by focusing on the role played by stock liquidity, which entails potential benefits not only for prospective acquirers, but also for targets. We find that 16.3 % of the population of 3433 firms going public in Europe from 1995 to 2009 become acquirers within 3 years of the IPO, while 16.8 % are targeted. Firms with more liquid stocks are more likely to acquire and complete a larger number of stock-financed acquisitions. More liquid firms are also more likely to be acquired, and at higher valuations. Our firm-level findings, supported by time-series regressions, imply that firms should time their IPO based on liquidity considerations to facilitate subsequent M&A activity as either acquirer or target.

(2017). Stock-financed M&As of newly listed firms [journal article - articolo]. In SMALL BUSINESS ECONOMICS. Retrieved from https://hdl.handle.net/10446/75241

Stock-financed M&As of newly listed firms

Vismara, Silvio
2017-01-01

Abstract

Newly listed firms are increasingly active in mergers and acquisitions (M&As). The “stock as currency” motivation explains why firms engage in stock-financed acquisitions after their Initial Public Offering (IPO). We extend its implications by focusing on the role played by stock liquidity, which entails potential benefits not only for prospective acquirers, but also for targets. We find that 16.3 % of the population of 3433 firms going public in Europe from 1995 to 2009 become acquirers within 3 years of the IPO, while 16.8 % are targeted. Firms with more liquid stocks are more likely to acquire and complete a larger number of stock-financed acquisitions. More liquid firms are also more likely to be acquired, and at higher valuations. Our firm-level findings, supported by time-series regressions, imply that firms should time their IPO based on liquidity considerations to facilitate subsequent M&A activity as either acquirer or target.
articolo
2017
Signori, Andrea; Vismara, Silvio
(2017). Stock-financed M&As of newly listed firms [journal article - articolo]. In SMALL BUSINESS ECONOMICS. Retrieved from https://hdl.handle.net/10446/75241
File allegato/i alla scheda:
File Dimensione del file Formato  
IPO MA liquidity 20151124.pdf

Solo gestori di archivio

Versione: Documento in Pre-print
Licenza: Licenza default Aisberg
Dimensione del file 719.52 kB
Formato Adobe PDF
719.52 kB Adobe PDF   Visualizza/Apri
Vismara - Stock-financed M&As.pdf

Solo gestori di archivio

Versione: publisher's version - versione editoriale
Licenza: Licenza default Aisberg
Dimensione del file 394.06 kB
Formato Adobe PDF
394.06 kB Adobe PDF   Visualizza/Apri
Pubblicazioni consigliate

Aisberg ©2008 Servizi bibliotecari, Università degli studi di Bergamo | Terms of use/Condizioni di utilizzo

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10446/75241
Citazioni
  • Scopus 16
  • ???jsp.display-item.citation.isi??? 15
social impact