Question

As a percentage of the acquirers market cap, how big does an acquisition target generally has to be to have impact on the acquirers stock price? (normally)

Answer 1

Normally 10% to 150%

Answer 2

This is a dangerous path to go down. Let's assume that you decide that buying a target that is less than 5% of your value will have no impact on your stock price and you decide to be sloppy in your analysis. Now, let's assume that you do this twenty times during the course of a year. You have in effect created the same impact as buying a company that is 100% of your value. So, adopt the same rule that you do with capital budgeting projects. Just because a project is small does not mean that you abandon the positive NPV rule.

Answer 3

Agreed.