We analyze a Bayesian merger game under two-sided asymmetric information about firm types. We show that the standard … prediction of the lemons market model-if any, only low-type firms are traded-is likely to be misleading: Merger returns, i.e. the … difference between pre- and post-merger profits, are not necessarily higher for low-type firms. This has two implications. First …

, which may not be possible since entry decisions are secret. By removing or mitigating this coordination failure, a merger … among laggards may lead to more entry (or innovation). Such a merger will also be more likely to benefit consumers when the … merger. Importantly, we find that in the presence of fixed entry costs and endogenous entry, fixed cost synergies are …

facilitated. Under a constraint channel, covenants hinder merger activity. We find support for the latter channel. Takeover …We investigate how loan covenants associated with potential target firms affect takeover deals. We propose two possible … channels. Under a discipline channel, the target firm becomes an attractive candidate for takeovers and merger deals are …

and cost. Consistent with this theory, we show that deals in more competitive environments and deals with fewer external …

This study examines whether top managerial executive envy plays an important role in merger waves. Since managerial … of the banking industry and find that merger waves are motivated by envy-pay …

sample of merger events is stratified in three ways: conglomerate versus non conglomerate, stock versus cash transactions …, and by merger activity level. Results of prior studies are examined for sensitivity to a failure to appropriately … incorporate the impact of merger on market model parameters. Results indicate that negative drift in post announcement returns for …

The merger arbitrage spread has declined by more than 400 bps since 2002. This decline, which is both economically and … statistically significant, corresponds to the decline in aggregate returns of merger arbitrage hedge funds, as well as increased … inflows into merger arbitrage hedge funds. Part of the decline in the arbitrage spread may be explained by increased trading …