When Negotiating A Price, Never Bid With A Round Number

2016-01-25 Forbes

According to a study by Matti Keloharju, affiliated to IFN, and Petri Hukkanen, investors who in mergers and acquisitions offer “precise” bids for company shares yield better market outcomes than those who offer round-numbered bids. “It turns out that if you make a precise bid, the targets are more likely to accept it, and more likely to accept it at a cheaper price. And with cash bids, they’ll generate a more positive market reaction,” says Matti Keloharju to Forbes.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se