Target’s organisational form and returns to Australian bidders in cross-border acquisitions

Colombage, Sisira R. N. and Gunasekarage, Abeyratna and Shams, Syed M. M. (2014) Target’s organisational form and returns to Australian bidders in cross-border acquisitions. Accounting and Finance, 54 (4). pp. 1063-1091. ISSN 0810-5391

Abstract

We present large sample evidence on return performances of Australian acquirers who bid for public and private targets in cross-border acquisitions. While placing a particular emphasis on the method of payment and the shareholder protection offered by the target country, we analyse the impact of various bid, firm and foreign-acquisition-specific characteristics on bidding firms’ abnormal returns. We find that Australian investors perceive cross-border acquisitions as value-creating exercises regardless of the organizational form of the target acquired. However, bidders for private targets earn higher return when the method of payment is stock and the targets are located in high investor protection countries. We further find that the abnormal returns are conditional to the relative size of the target, bid frequency, target country destination and the preacquisition financial performance of bidding firms.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this item cannot be displayed due to copyright restrictions.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 22 Apr 2016 05:03
Last Modified: 16 Feb 2017 04:40
Uncontrolled Keywords: acquirers of private targets; acquirers of public targets; economic freedom; excess return; foreign acquisitions; investor protection
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: 10.1111/acfi.12031
URI: http://eprints.usq.edu.au/id/eprint/27533

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