Targets Tax Shelter Participation and Takeover Premiums

• Main Authors: CHOW, Travis, KLASSEN, Kenneth J., LIU, Yanju
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2016
• Subjects: tax sheltering; new evidence; non-sheltering status; target non-participation; tax shelter; tax avoidance; Accounting; Corporate Finance; Taxation
• Online Access: https://ink.library.smu.edu.sg/soa_research/1510; https://ink.library.smu.edu.sg/context/soa_research/article/2537/viewcontent/TargetTaxShelterPartTakeoverPremiums_2016_afv.pdf
• Institution: Singapore Management University

This paper examines the effect of targets' participation in tax shelters on takeover premiums in mergers and acquisitions. Using a novel data set in which targets disclose that they have not participated in tax shelters, we find that targets that make this statement in their merger filings are...