Post-Takeover Effects on Thai Bidding Firms: Are Takeovers in the Bidder's Interests?

David Allen and A. Soongswang ()
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A. Soongswang: School of Management, Shinawatra University, Pathumthani Campus, 99 Moo 10 Bangtoey, Samkok, Pathumthani 12160, Thailand

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2006, vol. 09, issue 04, 509-531

Abstract: This paper analyses takeover effects on the Thai stock market in terms of their impact on the bidding firms' shareholders. We apply a comprehensive analysis of shareholder wealth effects using multiple methods. Our results conform with prior studies: see Jensen and Ruback (1983), Agrawal and Jaffe (1999), Bruner (2002) and Campa and Hernando (2004). Thai takeovers result in significant negative abnormal returns over the sixteen months after the takeover. The abnormal returns, variously defined, vary from -4% to -6%, and -0.20% (monthly) for the bidding firm's shareholders. Thai takeovers do not appear to add to bidding firms' shareholder wealth.

Keywords: Thai takeovers; bidding firms; control portfolios; bootstrappedt-tests (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (4)

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DOI: 10.1142/S0219091506000847

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