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- W2527929798 abstract "This study analyzed activism that leads to a merger or acquisition (M&A) of a firm to see its benefits for the shareholders at the target firm as well as its acquirer. It used over thirty years of data to understand the impact of the activists’ demands of strategic significance for the firms. It examined the premium fetched at acquisition announcement, bid counts and cash versus stock offers to see the benefits of activism to the target firm and its shareholders. It checked the performance reflected in the premium fetched to compare activists based on their overall experience, industry specialization and ownership stake. Most importantly, it analyzed the long-term post-acquisition performance of firms for cases that involved the activists versus others. It noted that the involvement of activists led to above 30% premium for the target firms benefiting its shareholders, as compared to about 15-20% for the non-activism related M&A. It also observed a 30% increase in the post-acquisition performance of the acquirer or the merged firm up to five years after the effective date of the M&A transaction for an activism related M&A, as compared to others. The results provide strong evidence that activism leads to positive value creation for the shareholders of a target firm at the time of acquisition. It challenged the popular perception that activists are near-term focused investors and corporate raiders. It found that activists bring lasting gains to the acquirer and its shareholders. The strategic changes brought in by the activist continue to influence the performance of the target and its acquirer for the long-term. It concluded that activists help discipline a target firm in the short as well as the long terms. Investor activism can steer M&A to successful outcomes for the target and the acquirer. It also observed the positive spillover effects of activism on comparable firms in the M&A context." @default.
- W2527929798 created "2016-10-14" @default.
- W2527929798 creator A5030586076 @default.
- W2527929798 date "2015-01-01" @default.
- W2527929798 modified "2023-09-25" @default.
- W2527929798 title "Investor Activism and Mergers and Acquisitions (M&A)" @default.
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- W2527929798 doi "https://doi.org/10.2139/ssrn.2843553" @default.
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