TITLE:
An Analysis of the Determinants of Arbitrage Spread
AUTHORS:
Etienne Redor
KEYWORDS:
Arbitrage Spread, Determinants, Mergers and Acquisitions
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.3,
March
12,
2019
ABSTRACT: This study examines the determinants of arbitrage
spread of S&P 500 firms between 2004 and 2014. We find that bid hostility,
the relative size of the target compared to the potential bidder and the
acquisition premium paid by the bidding firm are associated with greater
arbitrage spread while the proportion of cash in the offer and target
termination fees are associated with smaller arbitrage spread.