Post-Merger Stock Performance of Acquiring Hospitality Firms

Jing Yang, Woo Gon Kim and Hailin Qu
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Jing Yang: School of Hotel and Restaurant Administration, Oklahoma State University, Stillwater, OK 74078, USA
Woo Gon Kim: Dedman School of Hospitality, College of Business, Florida State University, 288 Champions Way, UCB 4116, Tallahassee, FL 32306, USA and International Scholar from Kyung Hee University, 1 Hoegi-dong, Dongdaemun-gu, Seoul 130-701, Republic of Korea
Hailin Qu: School of Hotel and Restaurant Administration, Oklahoma State University, Stillwater, OK 74078, USA

Tourism Economics, 2010, vol. 16, issue 1, 185-195

Abstract: This study examines the long-term post-merger stock performance of acquiring hospitality firms between 2000 and 2006 in the USA. The Jensen measure is used to investigate the long-term financial performance of acquiring hospitality firms. A sample of 15 hospitality companies with 8 lodging REITs and 7 hotel/casino companies is analysed. The companies' stock performances are compared against indices of related hotel and REITs sectors and against the S&P 500 index. The study generates mixed findings. The results showed significant positive gains for the acquiring firms when compared to the S&P 500 index; yet, the acquiring firms failed to generate significant gains when compared to sector indices. Furthermore, the REITs firms performed less well than the hotel/casino firms when compared against both market and sector indices.

Keywords: mergers and acquisitions; acquiring hospitality firms; stock performance; REITs (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:16:y:2010:i:1:p:185-195

DOI: 10.5367/000000010790872231

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