How Do Diversity of Opinion and Information Asymmetry Affect Acquirer Returns?

Sara B. Moeller; Frederik P. Schlingemann; René M. Stulz

doi:10.1093/rfs/hhm040

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How Do Diversity of Opinion and Information Asymmetry Affect Acquirer Returns?

Sara B. Moeller¹; Frederik P. Schlingemann¹; René M. Stulz²

¹ University of Pittsburgh · ² The Ohio State University

Review of Financial Studies 2007

We examine the theoretical predictions that link acquirer returns to diversity of opinion and information asymmetry. Theory suggests that acquirer abnormal returns should be negatively related to information asymmetry and diversity-of-opinion proxies for equity offers but not cash offers. We find that this is the case and that, more strikingly, there is no difference in abnormal returns between cash offers for public firms, equity offers for public firms, and equity offers for private firms after controlling for one of these proxies, idiosyncratic volatility.

DOI: 10.1093/rfs/hhm040
Volume: 20 (6)
Pages: 2047-2078
Language: en
Export: BibTeX
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