The Impact of the Announcement of Acquisition of Divested Assets on Buyers’ Wealth - Asset Fit and Disclosure of Funds Used: Evidence from the U.K

Balasingham Balachandran (), Robert Faff, Roger Love and Andrew Menon
Additional contact information
Balasingham Balachandran: Monash University, Australia
Roger Love: Monash University, Australia
Andrew Menon: Monash University, Australia

Multinational Finance Journal, 2008, vol. 12, issue 3-4, 219-240

Abstract: This study examines the effects of announcements of acquisition of assets on shareholder wealth of buyers over the period January 2000 to December 2002 in the U.K. Significant positive announcement period abnormal returns for ‘fit’ acquisitions of divested assets that disclosed the “sources of funds” are documented. Multivariate regression analysis shows that announcement period abnormal returns are significantly related to pre-announcement period abnormal returns, relative size of the acquisitions and disclosure of sources of funds. Overall, there is little or no support for the asset fit hypothesis. However, there is strong support for “Fund Source Disclosure”, “Fund Source Pecking-Order” and “Relative Size of Acquisition” Hypotheses .

Keywords: divested asset acquisition; buyers; price reaction; fit and non-fit; fund source (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.mfsociety.org/modules/modDashboard/uplo ... 2g41bvm19q118hv4.pdf
http://www.mfsociety.org/modules/modDashboard/uplo ... ogleScholar/784.html

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mfj:journl:v:12:y:2008:i:3-4:p:219-240

Access Statistics for this article

Multinational Finance Journal is currently edited by Panayiotis C. Andreou

More articles in Multinational Finance Journal from Multinational Finance Journal Contact information at EDIRC.
Bibliographic data for series maintained by Theodossiou Panayiotis ().