Bidder Hubris and Founder Targets — The Harvard Law School Forum on Corporate Governance

Small business need-to-know and news-to-watch.

Excerpt: Insofar as managerial hubris leads to overpayment in acquisitions, it is important to note that this overconfidence derives from two non-mutually exclusive sources: (i) the target’s stand-alone value under bidder’s control is overestimated or (ii) synergies from the combined entity are overestimated.

Read full article via Bidder Hubris and Founder Targets — The Harvard Law School Forum on Corporate Governance and Financial Regulation.