Essays on Firm Valuation and Value Appropriation

Sophisticated valuation techniques such as adjusted present value and real options, attract ever-increasing attention from theory and practice. A huge number of papers in the academic field provide various applications of these advanced tools, for instance valuing research and development, strategic alliances and real estate. Real options have also been used for valuing mergers and acquisitions. However, notwithstanding the rich knowledge about valuation models applicable for valuing takeovers, there remains a need to further develop theories about the distribution of the value creation between the target’s and acquirer’s shareholders. In other words, what part of the value creation can the acquirer appropriate? Strategic management literature underlines the impact of possessing unique capabilities, and both the strategic and financial literature emphasize the role of information asymmetry in explaining value appropriation in acquisitions. In this dissertation both simple and more complex valuation models are discussed, and we propose a real option-game model that analyzes the acquirer’s value appropriation. In our valuation and value appropriation models, the specific resources and capabilities of the evaluator are considered. By explicitly taking the acquirer resources into account in the valuation analysis, and by developing a new application of a combined option-game model, this PhD thesis is taking a step in further bridging the gap between finance theory and strategic management.

Wouter De Maeseneire (1977) obtained his Master’s degree in Applied Economics magna cum laude from Ghent University, Belgium, in 1999. He joined the Department of Corporate Finance at Ghent University and the Competence Centre Accounting and Finance at the Vlerick Leuven Gent Management School in September 1999. In September 2001, Wouter was awarded with a scholarship from the Fund for Scientific Research-Flanders (Aspirant). In September 2002 he also joined ERIM as a PhD candidate to carry out his doctoral research. His work has been presented at several international conferences e.g., at the conferences of the European Financial Management Association and of the Strategic Management Society. His current research interests include valuation, real options and private equity.