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

Article

Shams, Syed M.M., 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. https://doi.org/10.1016/j.pacfin.2013.04.002
Article Title

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

ERA Journal ID32913
Article CategoryArticle
AuthorsShams, Syed M.M. (Author), Gunasekarage, Abeyratna (Author) and Colombage, Sisira R. N. (Author)
Journal TitlePacific-Basin Finance Journal
Journal Citation24, pp. 89-108
Number of Pages20
Year2013
PublisherElsevier
Place of PublicationNetherlands
ISSN0927-538X
Digital Object Identifier (DOI)https://doi.org/10.1016/j.pacfin.2013.04.002
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.

Keywordsacquisitions; nature of the target; abnormal returns; method of payment; bid characteristics
ANZSRC Field of Research 2020350202. Finance
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Byline AffiliationsMonash University
Institution of OriginUniversity of Southern Queensland
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