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The effects of litigation on mergers and acquisitions

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The effects of litigation on mergers and acquisitions

zhao, kun (2016) The effects of litigation on mergers and acquisitions. Masters thesis, Concordia University.

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Abstract

This paper investigates whether litigation impacts merger and acquisition outcomes for defendant firms. Our results indicate that being a defendant of a single lawsuit within the last two years appears to significantly increase the premium paid to this firm when it becomes the target of a takeover attempt, while incurring multiple lawsuits over this time frame decreases the premium (albeit not significantly so). Litigation is also correlated with takeover announcements, as incurring lawsuits within the last two years is associated with a significant increase in target firm candidacy (the likelihood of becoming a target), and incurring litigation after the takeover announcement is associated with a significant decrease in takeover completion. We explain our results through investor overreaction and uncertainty avoidance.

Divisions:Concordia University > John Molson School of Business > Finance
Item Type:Thesis (Masters)
Authors:zhao, kun
Institution:Concordia University
Degree Name:M. Sc.
Program:Administration (Finance option)
Date:February 2016
Thesis Supervisor(s):Walker, Thomas and Davis, Frederick
ID Code:981145
Deposited By: KUN ZHAO
Deposited On:17 Jun 2016 14:36
Last Modified:18 Jan 2018 17:52
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