TY - JOUR
T1 - Determinants of mergers
T2 - A case of specified purpose acquisition companies (SPACs)
AU - Lakićević, Milan
AU - Vulanović, Miloš
PY - 2011
Y1 - 2011
N2 - This paper establishes major determinants that enable SPACs to successfully execute merger combinations. Using a sample of SPACs, companies that represent a novel invention in capital markets, in the period between August 2003 and January 2010, we test for the most important characteristics of SPACs and their influence on mergers. Obtained results could impact behavior of SPAC investors and SPAC founders. Our major finding is that the size of the SPAC at the Initial Public Offering date has a significant negative effect on the probability of the merger in the future. Additionally, the number of warrants in a unit is a variable negatively related to the probability of a merger. Alternately, if a SPAC is underwritten by the investment bank Early Bird Capital there is an increased probability that a merger will be executed. © Milan Lakićević, Miloš Vulanović, 2011.
AB - This paper establishes major determinants that enable SPACs to successfully execute merger combinations. Using a sample of SPACs, companies that represent a novel invention in capital markets, in the period between August 2003 and January 2010, we test for the most important characteristics of SPACs and their influence on mergers. Obtained results could impact behavior of SPAC investors and SPAC founders. Our major finding is that the size of the SPAC at the Initial Public Offering date has a significant negative effect on the probability of the merger in the future. Additionally, the number of warrants in a unit is a variable negatively related to the probability of a merger. Alternately, if a SPAC is underwritten by the investment bank Early Bird Capital there is an increased probability that a merger will be executed. © Milan Lakićević, Miloš Vulanović, 2011.
KW - Merger determinants
KW - Mergers and acquisitions
KW - SPACs
KW - Venture capital
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UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-81755168949&origin=recordpage
M3 - RGC 21 - Publication in refereed journal
SN - 1810-4967
VL - 8
SP - 114
EP - 120
JO - Investment Management and Financial Innovations
JF - Investment Management and Financial Innovations
IS - 3
ER -