Does Short-Selling Potential Influence Mergers and Acquisitions Payment Choice?

Seminar abstract

Announcements of stock-financed mergers and acquisitions (M&As) may attract short selling of bidder shares by merger arbitrageurs.

It is hypothesized that bidders with higher short-selling potential include a higher proportion of cash in their M&A payments to reduce price pressure resulting from arbitrage short sales.

Consistent with this prediction, the researchers find a positive impact of the ex-ante net lending supply of bidder shares on the percentage of cash in public target payments.

They corroborate this result in a placebo analysis and several robustness tests. Their paper adds to a growing literature analysing the interplay between corporate and investor behaviour.

Booking

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Speaker bio

Marie Dutordoir is Head of the Accounting and Finance Division at the Alliance Manchester Business School, University of Manchester.

Before joining Manchester Business School in April 2009, Marie held a position at the Rotterdam School of Management (The Netherlands) and was a visiting scholar at Columbia Business School (New York).

Marie's research deals with;

• corporate securities issuance,
• mergers and acquisitions,
• short selling,
• corporate social responsibility,
• and topics at the interface between finance and other business disciplines (accounting, marketing, operations management).

Her research has been published in leading journals, such as Journal of Financial Economics, Journal of Operations Management, Journal of Financial and Quantitative Analysis, and Journal of Corporate Finance.