Cross-border arbitrage and acquirers’ returns in the Eurozone crisis

Using a sample of 1,263 European acquisitions over 2004–2012, we show that the performance of cross-border acquisitions is significantly affected by the Eurozone and the euro debt crisis. First, due to financial market integration and the elimination of exchange rate risk, intra-Eurozone acquisitions do not earn any abnormal returns for bidders. Second, as a result of the euro debt crisis and the temporary misvaluation among European countries, acquisitions earn positive abnormal returns only for non-Eurozone companies acquiring Eurozone targets. These abnormal returns are driven by the depreciation of the euro and the use of low-cost capital available to overvalued acquirers

What do premiums paid for bank M&As reflect?:The case of the European Union

We analyze the takeover premiums paid for a sample of domestic and cross-border bank takeovers in the European Union between 1997 and 2007. We find that acquiring banks value profitable, high-growth and low risk targets. We also find that the strength of bank regulation and supervision as well as deposit insurance regimes in Europe have measurable effects on takeover pricing. Stricter bank regulatory regimes and stronger deposit insurance schemes lower the takeover premiums paid by acquiring banks. This result, presumably in anticipation of higher compliance costs, is driven by domestic deals. Similar qualitative results are found for both the entire sample and the sample of publicly traded targets

Random Motions at Finite Velocity on Non-Euclidean Spaces

In this paper, random motions at finite velocity on the Poincaré half-plane and on the unit-radius sphere are studied. The moving particle at each Poisson event chooses a uniformly distributed direction independent of the previous evolution. This implies that the current distance d(P0,Pt) from the starting point P0 is obtained by applying the hyperbolic Carnot formula in the Poincaré half-plane and the spherical Carnot formula in the analysis of the motion on the sphere. We obtain explicit results of the conditional and unconditional mean distance in both cases. Some results for higher-order moments are also presented for a small number of changes of direction