Finance Professor Publishes in Journal of Business Finance & Accounting

 

 

Dr. Cheolwoo Lee, Associate Professor, recently published a paper titled “Effective Post-Signing Market Check or Window Dressing? The Role of Go-Shop Provisions in M&A Transactions.” Lee worked on this paper along with his peer, Jin Q Jeon.

It has taken about four years from the first publication draft to become published in the Journal of Business Finance & Accounting. The paper’s topic involves questioning whether a deal protection device that allows the target management to actively canvass and negotiate with other potential bidders for a limited time, called the go-shop provision, is actually beneficial to shareholders or if it is a fake gesture used as legal protection for target management.

Lee further explains his conclusions, “By examining 1,706 M&A deals from 2004 to 2010, we find that the go-shop provision is included for the benefit of the target shareholders. Specifically, M&A deals with the provision have higher deal premiums and deal competition. The announcement returns for these deals are significantly higher, which suggests that the market recognizes the go-shop inclusion as a positive signal. We conclude that the go-shop provision serves as an effective post-signing market check, rather than as a window dressing or cosmetic gesture.”

This topic became an interest to Lee because no one else has ever formally tested the consequences of the go-shop provision. The research performed in this literature provides new answers and perspectives for finance.

Lee is also working on other papers that involve multiple lead underwriter IPOs.

“My other papers examine financial analysts’ objectivity in issuing recommendations under the unprecedented competition among lead underwriters and how having multiple lead underwriters in the syndicate affects firm visibility in the after-IPO market.”

Congratulations to Dr. Lee for another amazing publication! The paper can be accessed here: http://onlinelibrary.wiley.com/doi/10.1111/jbfa.12048/full