Value Creation in Distressed M&As
(2018) BUSN79 20181Department of Business Administration
- Abstract
- This thesis concludes that financially distressed targets’ shareholders
gain significantly higher premiums. Acquirers’ shareholders suffer from
value destruction in the short-run when acquiring distressed targets,
whereas in the long-run value is created. However, both findings are
insignificantly different from non-distressed M&As. Key long-term
value drivers in distressed M&As are relative size affecting acquirer
returns in a curvilinear relation and the potential for replacing an
inefficient management. Surprisingly, acquirers’ pre-merger financial
viability does not robustly impact long-term value. - Popular Abstract
- This thesis concludes that financially distressed targets’ shareholders
gain significantly higher premiums. Acquirers’ shareholders suffer from
value destruction in the short-run when acquiring distressed targets,
whereas in the long-run value is created. However, both findings are
insignificantly different from non-distressed M&As. Key long-term
value drivers in distressed M&As are relative size affecting acquirer
returns in a curvilinear relation and the potential for replacing an
inefficient management. Surprisingly, acquirers’ pre-merger financial
viability does not robustly impact long-term value.
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8954571
- author
- Freundl, Raphael LU and Wähning, Patrick LU
- supervisor
- organization
- course
- BUSN79 20181
- year
- 2018
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- M&A, Financial Distress, Value Creation, Corporate Restructuring, Event Study, Acquisition Premium, Cumulative Abnormal Returns (CAR), Buy-and-Hold Abnormal Returns (BHAR)
- language
- English
- id
- 8954571
- date added to LUP
- 2018-07-06 08:38:56
- date last changed
- 2018-07-06 08:38:56
@misc{8954571, abstract = {{This thesis concludes that financially distressed targets’ shareholders gain significantly higher premiums. Acquirers’ shareholders suffer from value destruction in the short-run when acquiring distressed targets, whereas in the long-run value is created. However, both findings are insignificantly different from non-distressed M&As. Key long-term value drivers in distressed M&As are relative size affecting acquirer returns in a curvilinear relation and the potential for replacing an inefficient management. Surprisingly, acquirers’ pre-merger financial viability does not robustly impact long-term value.}}, author = {{Freundl, Raphael and Wähning, Patrick}}, language = {{eng}}, note = {{Student Paper}}, title = {{Value Creation in Distressed M&As}}, year = {{2018}}, }