Acquisition Appraisal. TTT
- presenting and testing the financial theoriesaf Lønroth H
Why is it that the stock markets often view acquisitions as bad investments? Is it because managers are more concerned with growth than with creating value for their shareholders and, hence, are wasting good money on bad acquisitions? Or are the stock markets so focused on fast returns that they punish companies which makes long term investments even if they are profitable investments? These and related questions are often posed and heavily discussed in the wake of acquisitions, implying that the acquiring companies' managers and stock holders, respectively, do not always see eye on acquisitions and acquisition appraisal. In Acquisition Appraisal the financial theories on acquisition appraisal are pre-sented from both the acquiring company's and the stock market's perspective. Apart from giving a thorough presentation and assessment of the central theories in this area the book also tests the theories using international acquisitions conducted by Danish companies in the period 1988-1992 as empirical evidence. Thus, the book both provides evidence on how the Danish stock market actually appraised these acquisitions as well as insight into how a population of Danish companies work in practice when appraising potential acquisitions targets i.e., the methods they use to assign value to acquired foreign entities; and the experience they have accumulated in the course of negotiation, during the following integration phase, etc. With this background, it is hoped that this publication will inspire practitioners and consult-ants to master the complicated acquisitions process. The book will also serve as useful guidance for the theoretically interested.
- 21. Oktober 1996