search query: @indexterm INITIAL PUBLIC OFFERINGS / total: 176
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| Author: | Cooney, J. W. Moeller, T. Stegemoller, M. |
| Title: | The underpricing of private targets |
| Journal: | Journal of Financial Economics
2009 : JUL, VOL 93:1, p. 51-66 |
| Index terms: | mergers initial public offerings valuation uncertainty finance |
| Language: | eng |
| Abstract: | The purpose of the article is to study acquisitions of private companies with valuation histories. By examining US withdrawn IPO's from 1996-2005, the authors find that acquirer announcement returns correlate positively with target valuation revisions. In general, the acquirer announcement returns are positive. These positive announcement returns are mostly consequence of targets that are acquired at a higher price than their prior valuation would indicate, which is in line with pricing effects related to the uncertainty of target valuation and biases in negotiation outcomes. |
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