Literature Review Women on boards and in TMTS and firm performance 105 costly EUR 43 5 million were paid in total for the acquired shares roughly a third of it was Goodwill EUR 13 3 million The following figure 4 4 shows the amounts of cash and future earn outs paid in takeovers and reports the amount of goodwill separately Optimism and overconfidence predict that corpo rate projects are undertaken quickly which gene rally is in the interest of shareholders Gervais et al 2002 Certainly quick action applied to Rueter However this goes along with an underestimation of risk As shown by Heaton 2002 for optimistic managers it cannot be excluded that Rueter did not only overvalue his own expansion strategy but also his ability to manage these projects It is likely that he was prone to invest in his own projects although these might have had a negative net present value With respect to the high number of acquisitions within very short time it is doubtful whether Rueter carefully conducted a due diligen ce ahead of each acquisition and thorough market analyses when founding additional subsidiaries in particular when considering the large number of disposals of subsidiaries that followed soon after the crisis year 2007 Furthermore acquiring ma nagers on average overpay for their targets Roll 1986 The paid premiums are at least partly attri butable to valuation errors and hubris on the part Figure 4 4 Acquisitions paid with cash and future earn outs and thereof goodwill in EUR thousand Source CONERGY AG Annual Reports 2002 2010 50 000 40 000 30 000 20 000 10 000 2006 2007 20082004 450 4 793 3 421 43 459 15 038 12 935 300252 2005 0 thereof Goodwill Takeover paid with cash future earn outs 13 344 of the bidder Consistent with Roll s hubris hy pothesis of takeovers Rueter presumably being overly optimistic about potential synergies may have overestimated the increase in value for the combined firm This is supported by the fact that the majority of CONERGY s at the height of expan sion 83 subsidiaries both acquired and founded was either discontinued divested or liquidated af ter the company s crisis year of 2007 Furthermore adjustments on goodwill amounted to EUR 21 8 million in 2007 restated numbers CONERGY AG 2009 p 142 Most attributed values at the date of acquisition were thus at least not sustainable if not unjustified Complexity within the Group was not only consi derably increased by founding subsidiaries around the globe and acquiring horizontally and vertically but also by inflating the organizational structure through establishing a multitude of project com panies as well as numerous intermediary hol dings Long term project development was the core of the EPURON business area including pro CEO optimism and overconfidence

Vorschau DIRK-Forschungsreihe Band 21 Workforce diversity and personal policies Seite 105
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