How have M&As Changed? Evidence from the Sixth Merger Wave

When?

Thursday 5 July 2012, 13:30

Where?

32MS03

Open to:

Public, Staff, Students

Speaker:

Mr Christos Mavis, University of Surrey

Biography

Christos is a Lecturer of Finance in the Surrey Business School (ex- School of Management) in the University of Surrey. He graduated from the National Kapodistrian University of Athens with a BSc degree in Economics. He completed his MSc degree in Durham Business School in the field of Corporate and International Finance with distinction. Christos pursues his PhD in the area of Corporate Finance and, more specifically, in Mergers and Acquisitions (M&As) at the ICMA Centre in the University of Reading.
His main interests lie in merger waves, CEO turnovers, public vs private takeover targets, and CEO acquisitiveness and their impact on shareholder value creation. His research is presented every year in prestigious North American and European Conferences and his most current work is forthcoming in the European Journal of Finance. Christos currently teaches Topics in Finance and has previously taught Portfolio Management, Microeconomics, and Corporate Finance.”

Abstract

We examine the characteristics of the sixth merger wave that started in 2003 and came to an end approximately in late-2007. The drivers of this wave lie primarily in the availability of abundant liquidity, in line with neoclassical explanations of merger waves. Acquirers were less overvalued relative to targets and merger proposals comprised higher cash elements. Moreover, the market for corporate control was less competitive, acquirers were less acquisitive, managers displayed less over-optimism and offers involved significantly lower premiums, indicating more cautious and rational acquisition decisions. Strikingly however, deals destroyed at least as much value for acquiring shareholders as in the 1990s.

All welcome.