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dc.contributor.authorJenter, Dirken_US
dc.contributor.authorLewellen, Katharinaen_US
dc.date.accessioned2012-01-02en_US
dc.date.accessioned2012-01-26T12:24:17Z-
dc.date.available2012-01-26T12:24:17Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/54920-
dc.description.abstractThis paper explores the impact of target CEOs' retirement preferences on the incidence, the pricing, and the outcomes of takeover bids. Mergers frequently force target CEOs to retire early, and CEOs' private merger costs are the forgone benefits of staying employed until the planned retirement date. Using retirement age as an instrument for CEOs' private merger costs, we find strong evidence that target CEO preferences affect merger patterns. The likelihood of receiving a takeover bid increases sharply when target CEOs reach age 65. The probability of a bid is close to 4% per year for target CEOs below age 65 but increases to 6% for the retirement-age group, a 50% increase in the odds of receiving a bid. This increase in takeover activity appears discretely at the age-65 threshold, with no gradual increase as CEOs approach retirement age. Moreover, observed takeover premiums and target announcement returns are significantly lower when target CEOs are older than 65, reinforcing the conclusion that retirement-age CEOs are more willing to accept takeover offers. These results suggest that the preferences of target CEOs have first-order effects on both bidder and target behavior.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper: Behavioral Economics 3681en_US
dc.subject.jelG30en_US
dc.subject.jelG34en_US
dc.subject.ddc330en_US
dc.subject.keywordmergers & acquisitionsen_US
dc.subject.keywordCEO preferencesen_US
dc.subject.keywordprincipal-agent problemsen_US
dc.subject.stwÜbernahmeen_US
dc.subject.stwFührungskräfteen_US
dc.subject.stwPräferenztheorieen_US
dc.subject.stwAltersgrenzeen_US
dc.subject.stwPrinzipal-Agent-Theorieen_US
dc.subject.stwUSAen_US
dc.titleCEO preferences and acquisitionsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn682034894en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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