Private public distinction of the target and the long run operating performance of acquirers

Shams, Syed M. M. and Gunasekarage, Abeyratna (2016) Private public distinction of the target and the long run operating performance of acquirers. Pacific Accounting Review, 28 (1). pp. 38-58. ISSN 0114-0582

Abstract

Purpose
– The purpose of this study is to examine whether the acquirers of private targets outperform their peers that acquire public targets in the long run.

Design/methodology/approach
– Using two samples of acquirers of private and public targets, this paper analyses their short-run market performance and long-run operating performance. Univariate analyses and multiple regressions are used to analyse abnormal stock returns and abnormal cash flow performances of bidders.

Findings
– Acquirers of private targets earn significantly higher abnormal return than acquirers of public targets during the announcement period. Similarly, the long-run operating performance of acquirers of private targets is significantly higher than that of the acquirers of public targets. However, the performance difference between two groups is more pronounced when cash flows are scaled by the market value of acquirers.

Originality/value
– This is the first Australian study to examine whether the long-run operating performance of acquirers depends on the organisational form of the target acquired.


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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: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 29 Jan 2016 05:46
Last Modified: 06 Jul 2016 05:23
Uncontrolled Keywords: long-term operating performance, industry, size and performance-adjusted cash flow return, mergers and acquisitions, acquirers of public targets, acquirers of private targets, abnormal return
Fields of Research : 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150201 Finance
Socio-Economic Objective: B Economic Development > 90 Commercial Services and Tourism > 9001 Financial Services > 900102 Investment Services (excl. Superannuation)
Identification Number or DOI: 10.1108/PAR-02-2014-0004
URI: http://eprints.usq.edu.au/id/eprint/28381

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