Dr Shan Ji and colleagues show that the presence of end-of-day (EOD) target price manipulation prior to M&As increases the probability of an M&A deal withdrawal, and decreases the premium paid. Having looked at M&As from over 45 countries from 2003 to 2014, they find that more detailed exchange trading rules lower the probability of withdrawal, mitigate the negative impact of EOD manipulation on withdrawal, and raise premiums paid. Finally, while there are fewer cases of acquirer price manipulations prior to M&As, the data indicate that positive acquirer price manipulation in share M&As increases the probability of deal withdrawal.
The article will soon be published in the British Journal of Management.
A specialist in data infrastructure and financial market surveillance, Dr Ji has provided expertise on the design of market surveillance for foreign exchange benchmarks and OTC instruments. He was most recently the Chief Information Officer of the CMCRC where he led the activities of the central development team. He started his career as Lead Business Analyst at SMARTS Group International, the world-leading provider of securities markets surveillance technology, while carrying out research in securities market integrity which has been published in the Journal of Business Ethics. He was awarded a PhD in Finance from the University of New South Wales and a Bachelor of Commerce (Honours) in Finance from the University of Western Australia.
The article is accessible via the following links:
https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8551.12374
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3254874