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Do Stock-Financed Acquisitions Destroy Value? New Methods and Evidence

Golubov, Andrey; Petmezas, Dimitris; Travlos, Nickolaos G.

Do Stock-Financed Acquisitions Destroy Value? New Methods and Evidence Thumbnail


Andrey Golubov

Nickolaos G. Travlos


We contribute to the debate on whether stock-financed acquisitions destroy value for shareholders. A stock-financed acquisition is a joint takeover/equity-issue event. Using seasoned equity offering announcement returns, we estimate through linear prediction and propensity-score matching the share price drop that stock acquirers experience due to the financing choice. Net of this effect, stock-financed acquisitions are not value destructive, and the method of payment generally has no further explanatory power in the cross-section of acquirer returns. Our evidence is largely inconsistent with the agency costs of overvalued equity hypothesis.


Golubov, A., Petmezas, D., & Travlos, N. G. (2016). Do Stock-Financed Acquisitions Destroy Value? New Methods and Evidence. Review of Finance, 20(1), 161-200.

Journal Article Type Article
Acceptance Date Feb 19, 2015
Online Publication Date Apr 11, 2015
Publication Date 2016-03
Deposit Date Jul 29, 2020
Publicly Available Date Jul 29, 2020
Journal Review of Finance
Print ISSN 1572-3097
Electronic ISSN 1573-692X
Publisher Oxford University Press
Peer Reviewed Peer Reviewed
Volume 20
Issue 1
Pages 161-200
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Published Journal Article (473 Kb)

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Copyright Statement
© The Authors 2015. Published by Oxford University Press on behalf of the European Finance Association.
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs
licence (, which permits non-commercial reproduction and distribution of
the work, in any medium, provided the original work is not altered or transformed in any way, and that the work properly cited.
For commercial re-use, please contact

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