Corpus ID: 203651898

The Valuation Effects of Earnout in M&a of Financial Institutions the Valuation Effects of Earnout in M&a of Financial Institutions

@inproceedings{Barbopoulos2013TheVE,
  title={The Valuation Effects of Earnout in M&a of Financial Institutions the Valuation Effects of Earnout in M&a of Financial Institutions},
  author={Leonidas G. Barbopoulos and John O. S. Wilson and J. Ang and L. Black and Matthew S. Cain and Santiago Carb{\'o} Valverde and B. Casu and J. Coakley and Bob Deyoung and Espen Eckbo and S. Frame and J. Goddard and M. Goldstein and Owain Ap Gwylim and Jens Hagendorff and David Marques Ibanez and E. Kane and D. Mckillop and P. Molyneux and A. Sarkisyan and B. Scholtens and Sotiris K. Staikouras and Larry and Valencia and J. Spain and T. Driouchi and Annita Florou and A. Preda},
  year={2013}
}
We present new evidence on announcement period and long-run returns for a sample of mergers and acquisitions (M&A) involving US financial institutions, which use various methods of payment (cash, stock, mixed, and earnout). Financial institutions using earnout experience higher announcement period and long-run returns than counterparts using non-earnout payment methods. Returns to bidders increase when the ratio of earnout to total transaction value is high and when the management of the target… CONTINUE READING

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