17246外文翻译 并购支付方式在欧洲的选择.docx

17246外文翻译 并购支付方式在欧洲的选择.docx

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17246外文翻译并购支付方式在欧洲的选择

外文翻译

并购支付方式在欧洲的选择

姓名：

主力军

学号：

120107246

原文：

ThechoiceofpaymentmethodinEuropeanM&A

GlobalM&Aactivityhasgrowndramaticallyoverthelasttenyears,bringingwithitmajorchangesintheorganizationandcontrolofeconomicactivityaroundtheworld.Yet,thereismuchabouttheM&Aprocessthatwedonotfullyunderstand,includingthechoiceofpaymentmethod.GiventhelargesizeofmanyM&Atransactions,thefinancingdecisioncanhaveasignificantimpactonanacquirer’sownershipstructure,financialleverage,andsubsequentfinancingdecisions.Thefinancingdecisioncanalsohaveseriouscorporatecontrol,riskbearing,taxandcashflowimplicationsforthebuyingandsellingfirmsandshareholders.

InmakinganM&Acurrencydecision,abidderisfacedwithachoicebetweenusingcashandstockasdealconsideration.Giventhatmostbiddershavelimitedcashandliquidassets,cashoffersgenerallyrequiredebtfinancing.Asaconsequence,abidderimplicitlyfacesthechoiceofdebtorequityfinancing,whichcaninvolveatradeoffbetweencorporatecontrolconcernsofissuingequityandrisingfinancialdistresscostsofissuingdebt.Thus,abidder’sM&Acurrencydecisioncanbestronglyinfluencedbyitsdebtcapacityandexistingleverage.Itcanalsobestronglyinfluencedbymanagement’sdesiretomaintaintheexistingcorporategovernancestructure.Incontrast,asellercanbefacedwithatradeoffbetweenthetaxbenefitsofstockandtheliquidityandriskminimizingbenefitsofcashconsideration.Forexample,sellersmaybewillingtoacceptstockiftheyhavealowtaxbasisinthetargetstockandcandefertheirtaxliabilitiesbyacceptingbidderstockaspayment.Ontheotherhand,sellerscanprefercashconsiderationtosidesteptheriskofbecomingaminorityshareholderinabidderwithconcentratedownership,therebyavoidingtheassociatedmoralhazardproblems.Unfortunately,duetodatalimitations,thissellertradeoffcannotbeeasilymeasured.

Underexistingtheoriesofcapitalstructure,debtcapacityisapositivefunctionoftangibleassets,earningsgrowthandassetdiversificationandanegativefunctionofassetvolatility.Firmswithgreatertangibleassetscanborrowmoreprivatelyfrombanksandpubliclyinthebondmarket.Sincelargerfirmsaregenerallymorediversified,weexpectthemtohavealowerprobabilityofbankruptcyatagivenleverageratioandthus,greaterdebtcapacity.Thesefinancingconstraintandbankruptcyriskconsiderationscanalsoreducealenderswillingnesstofinanceabidder’scashbid,especiallyinrelativelylargedeals.

InassessingpotentialdeterminantsofanM&Apaymentmethod,ourfocusisonabidder’sM&Afinancingchoices,recognizingthattargetscanalsoinfluencethefinaltermsofanM&Adeal.However,ifatarget’sfinancingchoiceisunacceptabletothebidder,thentheproposedM&Atransactionislikelytobeabortedorelsethebiddercanmakeahostileofferonitsownterms.Foradealtosucceed,thebiddermustbesatisfiedwiththefinancialstructureofthedeal.

Bidderandtargetconsiderations:

*CorporateControl

Bidderscontrolledbyamajorshareholdershouldbereluctanttousestockfinancingwhenthiscausesthecontrollingshareholdertorisklosingcontrol.Assumingcontrolisvaluable,thepresenceofdominantshareholderpositionsshouldbeassociatedwithmorefrequentuseofcash,especiallywhenthecontrollingshareholder’spositionisthreatened.Tocapturethiseffect,weusetheultimatevotingstakeheldbythelargestcontrollingshareholder.

Abidderwithdiffuseorhighlyconcentratedownershipislesslikelytobeconcernedwithcorporatecontrolissues.Inlinewiththisargument,Martin（1996）documentsasignificantlynegativerelationshipbetweenthelikelihoodofstockfinancingandmanagerialownershiponlyovertheintermediateownershiprange.Therefore,weincorporatethepossibilityofanon-linearrelationshipbetweenthemethodofpaymentandthevotingrightsofabidder’scontrollingshareholderbyestimatingbothalinearandcubicspecificationfortheultimatevotingcontrolpercentageofthebidder’slargestshareholder.Inourrobustnessanalysis,wealsoestimateasplinefunctionforthisvariable.

CorporatecontrolconcernsinM&Aactivitycanmanifestthemselvesinmoresubtleways.Concentratedownershipofatargetmeansthatastockfinancedacquisitioncancreatealargeblockholder,threateningthecorporategovernanceoftheacquirer.Iftheselleriscloselyheldorisacorporationdisposingofadivision,thenownershipconcentrationtendstobeveryconcentrated.ThisimpliesthatfinancingtheM&Adealwithstockcancreateanewblockholderinthebidder.Whiletheriskofcreatinganewbidderblockholderwithstockfinancingishigherwhenatargethasaconcentratedownershipstructure,thisisespeciallyturewhenrelativesizeofthedealislarge.Tocapturetheriskofcreatingalargeblockholderwhenbuyingatargetwithstockfinancing,weemployCONTROLLOSS,theproductbetweenthetarget’scontrolblockandthedeal’sralativesize.Therelativedealsizeiscomputedastheratioofoffersize（excludingassumedliabilities）tothesumofabidder’sequitypre-offercapitalizationplustheoffersize.Thetarget’scontrollingblockholderisassumedtohave100%ownershipforunlistedtargetsandsubsidiarytargets.

*Collateral,FinancialLeverageandDebtCapacity

Weusethefractionoftangibleassetsasourprimarymeasureofabidder’sabilitytopaycash,financedfromadditionalborrowing.COLLATERALismeasuredbytheratioofproperty,plantandequipmenttobookvalueoftotalassets.Myers（1977）arguesthatdebtholdersinfirmswithfewertangibleassetsandmoregrowthopportunitiesaresubjecttogreatermoralhazardrisk,whichincreasesthecostofdebt,oftenmakingstockmoreattractive.Hovakimian,OplerandTitman（2001）findthatafirm’spercentageoftangibleassetshasastrongpositiveinfluenceonitsdebtlevel.

Wealsocontrolforabidder’sfinancialconditionwithitsleverageratio,FIN’LLEVERAGE.Sincecashisprimarilyobtainedbyissuingnewdebt,highlyleveredbiddersareconstrainedintheirabilitytoissuedebtandasaconsequenceusestockfinancingmorefrequently.Abidder’sfinancialleverageismeasuredbythesumofthebidder’sfacevalueofdebtpriortotheM&Aannouncementplusthedealvalue（includingassumedliabilities）dividedbythesumofthebookvalveoftotalassetspriortotheannouncementplusthedealvalue（includingassumedliabilities）.Thiscapturesthebidder’spost-dealleverageifthetransactionisdebtfinanced.ThismeasurediffersfromMartin（1996）whousesapre-dealbidderleveragemeasureadjustedforindustrymeanandreportsaninsignificanteffect.

Biddersizeislikelytoinfluenceitsfinancingchoices.Largerfirmsaremorediversifiedandthus,haveproportionallylowerexpectedbankruptcycosts.Theyalsohavelowerflotationcostsandarelikelytohavebetteraccesstodebtmarkets,makingdebtfinancingmorereadilyavailable.Thus,cashfinancingshouldbemorefeasibleinthecaseoflargerfirms.Largerfirmsarealsomoreapttochoosecashfinancinginsmallerdealsduetoitseaseofuse,providedtheyhavesufficientunuseddebtcapacityorliquidassets.Further,theuseofcashallowsthebiddertoavoidthesignificantcostsofobtainingshareholderapprovalofpre-emptiverightsexemptionsandauthorizationsandthehigherregulatorycostsofstockoffers.Wemeasurebidderassetssizebythelogofpre-mergerbookvalueofassetsindollars（totalassets）.Inadditiontobiddercontrolandfinancingconsiderations,weneedtotakeintoaccountseveralotherbiddercharacteristics.

*RelativeDealSize,BidderStockPriceRunupandAsymmetricInformation

Hansen（1987）predictsthatbiddershavegreaterincentivestofinancewithstockwhentheasymmetricinformationabouttargetassetsishigh.Thisinformationasymmetryislikelytoriseastargetassetsriseinvaluerelativetothoseofabidder.Yet,stockisusedinrelativelylargerdeals,itproducesmoreseriousdilutionofadominantshareholder’scontrolposition.Finally,asbidderequitycapitalizationrises,concernaboutitsfinancingconstraintfalls,sincethereisarelativelysmallerimpactonitsoverallfinancialconditon.WeproxyfortheseeffectswithRELSIZE,whichiscomputedastheratioofdealoffersize（excludingassumedliabilities）dividedbythesumofthedeal’soffersizeplusthebidder’spre-offermarketcapitalizationattheyear-endpriortothebid.

BothMyersandMajluf（1984）andHansen（1987）predictthatbidderswillprefertofinancewithstockwhentheyconsidertheirstockovervaluedbythemarketandprefertofinancewithcashwhentheyconsidertheirstockundervalued.Asuncertaintyaboutbidderassetvaluerises,thisadverseselectioneffectisexacerbated.Martin（1996）findsevidenceconsistentwiththisadverseselectionprediction.Forasampleofpubliclytradedtargets,Travlos（1987）findsthatstockfinancedM&Adealsexhibitmuchlargernegativeannouncementeffectsthancashfinanceddeals.Heconcludesthisisconsistentwiththeempiricalvalidityofanadverseselectioneffect.Weuseasaproxyforbidderovervaluation（orundervaluation）,calculatedfromabidder’sbuyandholdcumulativestockreturnovertheyearprecedingtheM&Aannouncementmonth.

Inadditiontobidderconsiderations,weneedtotakeintoaccounttypicaltargetconsiderations.Thesepreferencesarerelatedtorisk,liquidity,asymmetricinformationandhomebias.

T1.UnlistedTargetsandSubsidiaryTargets

Weuseanindicatorvariable,UNLISTEDTARGET,tocontrolforlistingst