Special topics in mergers and acquisitions

This thesis investigates the efficiency of the market for corporate control from different perspectives. First, by focusing on acquiring firm size, we find that the effect of acquiring firm size on the wealth effect of acquirer shareholders is different from serial and non-serial acquisitions after accounting for potential sample-selection bias. Our results suggest that non-serial acquirers with smaller size in general require potential synergies when bidding. The wealth effect of larger serial acquirer shareholders is not worse off when deals are wealth-destructive. Second, employing target termination is expected to facilitate the deal completion and protect the benefits of target firms under the efficiency hypothesis. The 2011 reform on the UK Takeover Code prohibits the use of target break fees. Our results on the effect of prohibiting break fees reversely add evidence to the efficiency hypothesis. Third, based on the 2011 reform, we examine whether disclosing possible offers improves the relative bargaining position of targets represented by offer premiums. Possible offer announcement improves the offer premiums that targets receive and the reform further strengths this effect. However, in the post-reform period, the shareholder returns around the date of announcing formal offers are significantly lower when possible offers have been released