Does the organisational form of the target influence market reaction to acquisition announcements? Australian evidence

Shams, Syed M.M. and Gunasekarage, Abeyratna and Colombage, Sisira R. N. (2013) Does the organisational form of the target influence market reaction to acquisition announcements? Australian evidence. Pacific-Basin Finance Journal, 24. pp. 89-108. ISSN 0927-538X

Abstract

Using public, private and subsidiary acquisitions, we examine whether abnormal returns to bidders depend on the organisational form of the target acquired. The evidence supports two main hypotheses: (i) bidders on private and subsidiary targets earn higher abnormal returns than bidders on public entities and (ii) bidders on private targets earn higher abnormal returns when the method of payment is stock. Acquisitions of unlisted public targets, privately negotiated acquisitions of private targets and acquisitions of subsidiaries from listed parents for cash are associated with higher abnormal returns.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to Published version in accordance with the copyright policy of the publisher.
Faculty / Department / School: Historic - Faculty of Business and Law - School of Accounting, Economics and Finance
Date Deposited: 15 Jul 2015 05:36
Last Modified: 13 Feb 2017 05:07
Uncontrolled Keywords: acquisitions; nature of the target; abnormal returns; method of payment; bid characteristics
Fields of Research : 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150201 Finance
Socio-Economic Objective: C Society > 94 Law, Politics and Community Services > 9402 Government and Politics > 940299 Government and Politics not elsewhere classified
Identification Number or DOI: 10.1016/j.pacfin.2013.04.002
URI: http://eprints.usq.edu.au/id/eprint/27532

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