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

Syed M.M. Shams, Abeyratna Gunasekarage and Sisira R.N. Colombage

Pacific-Basin Finance Journal, 2013, vol. 24, issue C, 89-108

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.

Keywords: Acquisitions; Nature of the target; Abnormal returns; Method of payment; Bid characteristics (search for similar items in EconPapers)
JEL-codes: G12 G14 G34 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:24:y:2013:i:c:p:89-108

DOI: 10.1016/j.pacfin.2013.04.002

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