M&A Waves and Stock Prices

Researchers have found a correlation between periods of high M&A activity in stock deals and subsequent stock market declines.  Rationale for the correlation are disputed.  The M&A activity seems to flourish when stock is overvalued. But why are sellers content to be paid in overvalued stock???  Shleifer & Vishny believed that managers of the seller unload the new stock for cash; Rhodes-Kropf & Viswanathan contend that sellers can not tell whether the deal price represents real value increases (synergies) or the overpricing of the acquirer's shares.  My view is that there is a relative difference in the overpricing; the target's shares are often more overpriced that the acquirer's (50% inflated stock is buying stock inflated at 100%) and that seller company executives diversify and partially cash out.  The current merger wave is based largely on cash deals, financed with low interest rate money.  There is also a dispute over whether the current wave reflected overvalue debt and will have a similar effect.