Is Attack the Best form of Defence? A Competing Risks Analysis of Acquisition Activity in the UK

Andrew Dickerson, Heather Gibson and Euclid Tsakalotos ()

Studies in Economics from School of Economics, University of Kent

Abstract: The primary purpose of this paper is to investigate whether companies can use acquisition as a strategy to reduce their probability of takeover. A subsidiary issue is whether such a strategy has any impact on their subsequent probability of bankruptcy. The determinants of making an acquisition, being taken over, and bankruptcy are modelled within a competing risks framework using two large samples of UK manufacturing companies. Our results indicate that, ceteris paribus, companies which make acquisitions can significantly reduce their conditional probability of being taken over, largely through the impact that acquisition has on corporate size. In this sense, attack, through acquisition, is the best form of defence, against takeover.

Keywords: Takeovers; Acquisitions; Bankruptcy; Competing Risks (search for similar items in EconPapers)
JEL-codes: C41 G33 G34 (search for similar items in EconPapers)
Date: 1999-05
New Economics Papers: this item is included in nep-cfn and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Is attack the best form of defence? A competing risks analysis of acquisition activity in the UK (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ukc:ukcedp:9907

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