What is the Price of Hubris? Using Takeover Battles to Infer Overpayments and Synergies
Publication
, Journal Article
Hietala, P; Kaplan, SN; Robinson, DT
Published in: Financial Management
January 1, 2003
We present a framework for determining the information that can be extracted from stock prices around takeover contests. In only two types of cases is it theoretically possible to use stock price movements to infer bidder overpayment and relative synergies. Even in these two cases, we argue that it is practically difficult to extract this information. We illustrate one of these generic cases using the takeover contest for Paramount in 1994 in which Viacom overpaid by more than $2 billion. Our findings are consistent with managerial overconfidence and/or large private benefits, but not with the traditional agency-based incentive problem.
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Published In
Financial Management
DOI
ISSN
0046-3892
Publication Date
January 1, 2003
Volume
32
Issue
3
Start / End Page
5 / 31
Related Subject Headings
- Finance
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment
Citation
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Hietala, P., Kaplan, S. N., & Robinson, D. T. (2003). What is the Price of Hubris? Using Takeover Battles to Infer Overpayments and Synergies. Financial Management, 32(3), 5–31. https://doi.org/10.2307/3666381
Hietala, P., S. N. Kaplan, and D. T. Robinson. “What is the Price of Hubris? Using Takeover Battles to Infer Overpayments and Synergies.” Financial Management 32, no. 3 (January 1, 2003): 5–31. https://doi.org/10.2307/3666381.
Hietala P, Kaplan SN, Robinson DT. What is the Price of Hubris? Using Takeover Battles to Infer Overpayments and Synergies. Financial Management. 2003 Jan 1;32(3):5–31.
Hietala, P., et al. “What is the Price of Hubris? Using Takeover Battles to Infer Overpayments and Synergies.” Financial Management, vol. 32, no. 3, Jan. 2003, pp. 5–31. Scopus, doi:10.2307/3666381.
Hietala P, Kaplan SN, Robinson DT. What is the Price of Hubris? Using Takeover Battles to Infer Overpayments and Synergies. Financial Management. 2003 Jan 1;32(3):5–31.
Published In
Financial Management
DOI
ISSN
0046-3892
Publication Date
January 1, 2003
Volume
32
Issue
3
Start / End Page
5 / 31
Related Subject Headings
- Finance
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment