Post-acquisition performance of acquiring companies and the difference in stock returns between tender offers and mergers

Abstract

This thesis examines the stock returns for acquiring companies, the difference in returns between tender offers and mergers and the effect of the method of payment. The sample consists of 440 acquisitions with publicly listed acquirers and targets in 17 European countries over the time period of 2001-2018. The main finding is that acquirers do not earn statistically significant abnormal returns in tender offers in the European market during 2001-2018 and the difference between tender offers and mergers is not significant. Additionally, this study finds evidence that the method of payment has a significant effect on acquirer returns. Acquisitions financed with all-cash have larger acquirer returns within a 21-day event window, but when tender offers are considered more specifically, cash as a payment method and tender offers as an acquisition type do not have significant positive synergies together.