Cross‐Border versus Domestic Acquisitions and the Impact on Shareholder Wealth

Danbolt, Jo; Maciver, Gillian

doi:10.1111/j.1468-5957.2012.02294.x

Cited by 70 publications

(56 citation statements)

References 59 publications

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“…Recently, the effect of investor protection laws on mergers and acquisitions has been examined (Danbolt and Maciver, 2012;Martynova and Renneboog, 2008b;Bris and Cabolis, 2008;Rossi and Volpin, 2004). Other literature has examined wealth effects in mergers and acquisitions across countries and over time as well as in relation to the acquirer's and target's attributes such as corporate governance (Harford et al, 2012;Bhagat et al, 2005).…”

Section: Investor Protectionmentioning

confidence: 99%

Takeover law to protect shareholders: Increasing efficiency or merely redistributing gains?

Wang

Lahr

2017

Journal of Corporate Finance

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We construct a dynamic takeover law index using hand-collected data on legal provisions and empirically examine the effect of takeover regulation to protect shareholders on shareholder wealth for bidders and targets in a multi-country setting. We find that a stricter takeover law increases combined wealth for bidders and targets, which suggests that stronger shareholder protection in the takeover bid process increases the efficiency of the takeover market. Contrary to our hypothesis, results show that stricter takeover law does not hurt bidders. Its effect on target announcement returns and takeover premiums is significantly positive and economically large. Our findings suggest that the mandatory bid rule and ownership disclosure increase synergistic gains in takeovers, whilst the fair-price rule and squeeze-out rights may reduce combined gains. Further results show that increased overall gains can be explained by greater competition in the market for corporate control and a shorter time to successful completion of a takeover under stricter takeover law. KeywordsTakeover laws, Mergers and acquisitions, Shareholder protection, Announcement returns, EU takeover directive JEL classification G32, G34, G38, K22, O16 AcknowledgementsWe thank

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Section: Investor Protectionmentioning

confidence: 99%

Takeover law to protect shareholders: Increasing efficiency or merely redistributing gains?

Wang

Lahr

2017

Journal of Corporate Finance

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“…Stock is a dummy equal to 7 Vitrue (2010) reports that Facebook activity peaks at 3pm, and is present after the closure of stock markets. 8 Studies include those by Asquith et al (1983), Travlos (1987), Rau and Vermaelen (1998), Sudarsanam and Mahate (2003), Faccio and Masulis (2005), Titman et al (2004), Draper and Paudyal, (2006), and Danbolt and MacIver (2012).…”

Section: Data Descriptionmentioning

confidence: 99%

Investor sentiment and bidder announcement abnormal returns

Danbolt

Siganos

Vagenas‐Nanos

2015

Journal of Corporate Finance

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We introduce the significance of a direct sentiment proxy as an explanatory variable of bidder announcement returns. We argue that sentiment subconsciously influences investor perception of potential merger synergies and risks, and therefore relates to bidder abnormal returns. We proxy daily sentiment based on Facebook status updates across seventeen international markets and show that there is a positive relation between sentiment and bidder announcement returns. In line with behavioral literature stating that sentiment more heavily influences uninformed traders, this relation is more pronounced in acquisitions with a low percentage of blockholder ownership, acquisitions of US public targets, and acquisitions of large targets relative to the size of the bidders. Our study goes beyond the conventional sentiment and stock market returns literature, uncovering a significant relation between sentiment and firm-specific abnormal returns to acquiring companies.

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“…In empirical studies, they are usually expressed directly or as a percentage (Pauser, 2007;Bassen, Schiereck, & Wübben, 2010;Danbolt & Maciver, 2012). The percentage is divided by 100 to be converted it into a proportion.…”

Section: Calculation Of the Effect Sizesmentioning

confidence: 99%

Do M&A deals create or destroy value? A meta-analysis.

Meckl

Röhrle

2016

EJBE

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Empirical research on the effect of M&A transactions on companies' performance has not shown clear results of success. It is often assumed that these transactions destroy rather than create value. This study employs meta-analytical techniques to evaluate the outcomes of M&A transactions empirically. This method allows a large quantity of transactions to be examined. Additional factors influencing the performance of M&A transactions are found using a moderator analysis. In total, 55,399 transactions between 1950 and 2010, extracted from 33 previous M&A studies, have been examined. The results of this study confirm findings from previous empirical studies, stating that M&A transactions predominantly do not have a positive impact on the success of a company. A moderator analysis indicates that the type of M&A and the time frame used for measurement influence the success of M&A transactions.

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Cross‐Border versus Domestic Acquisitions and the Impact on Shareholder Wealth

Cited by 70 publications

References 59 publications

Takeover law to protect shareholders: Increasing efficiency or merely redistributing gains?

Takeover law to protect shareholders: Increasing efficiency or merely redistributing gains?

Investor sentiment and bidder announcement abnormal returns

Do M&A deals create or destroy value? A meta-analysis.

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