Merger Imbalance and Returns in International Equity Markets

Zaremba, Adam; Grobelny, Przemysław

doi:10.2139/ssrn.2820587

Cited by 2 publications

(2 citation statements)

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“…In this sense, our evidence is consistent with some behavioural models that predict an underreaction pattern where long-term returns continuations are expected (Kadiyala and Rau, 2004;Croci et al, 2010). However, our findings are not coincident with Petmezas (2009), Porter and Singh (2010), Danbolt et al (2015), Zaremba and Grobelny (2017) and Chuang (2018) who find Table 3. Acquirer's short-and long-term abnormal performance by listing status of the target firm and market valuation.…”

Section: Acquirer Announcement Return and Long-term Performancesupporting

confidence: 91%

“…Graham et al (2013) show that managers who initiate mergers and acquisitions are more optimistic and more risk tolerant. Other arguments are considered by Zaremba and Grobelny (2017) who suggest that managers are fully rational when the acquisition is paid with overvalued stocks although future price reversals are expected in the long run. In this context, Croci et al (2010) examine the interaction between market valuation and managerial overconfidence.…”

Section: Behavioural Finance and Acquisitions: International Evidencementioning

confidence: 99%

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Market valuation and acquiring firm performance in the short and long term: Out-of-sample evidence from Spain

Viñas

Herrero

Latorre

2020

BRQ Business Research Quarterly

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We investigate bidder’s short- and long-term performance in periods of high and low valuation market in response to announcements of acquisitions carried out by Spanish listed firms over the period 1991–2016. We find that acquirers of unlisted targets fully react at the announcement date in high valuation periods, meanwhile the underreaction of listed target bidders at the moment of the announcement in low valuation markets is the result of return continuations. In addition, we find that the market reaction do not depend on recent merger history. Therefore, we provide evidence that bidder reaction to acquisitions is not consistent with the predictions of market sentiment (optimism) after controlling for the listing status of the target firm, not supporting, for a thinner market as the Spanish one, the evidence observed in US and UK markets. JEL CLASSIFICATION G14; G34; L33; D81

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Section: Acquirer Announcement Return and Long-term Performancesupporting

confidence: 91%

Section: Behavioural Finance and Acquisitions: International Evidencementioning

confidence: 99%

Market valuation and acquiring firm performance in the short and long term: Out-of-sample evidence from Spain

Viñas

Herrero

Latorre

2020

BRQ Business Research Quarterly

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Post-Merger Returns in Frontier Markets, or How We Learned to Stop Worrying and Love the Acquirers

Zaremba

Szyszka

Płotnicki

et al. 2018

Journal of Business Economics and Management

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Abstract. This study presents the results from a comprehensive out-of-sample test of long-run returns following mergers and acquisitions (M&As). Using a unique sample from 23 frontier markets of almost 800 transactions conducted during the years 1992 to 2016, we implement both crosssectional tests and time-series examinations based on a calendar-time portfolio approach. Contrary to evidence from developed markets, the M&As in these frontier markets do not lead to abnormal underperformance of acquirers, regardless of whether they paid for the acquisition with cash or stock. The results are robust to many considerations, including subsample and subperiod analysis, alternative formation periods, different portfolio construction approaches.

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Merger Imbalance and Returns in International Equity Markets

Cited by 2 publications

References 0 publications

Market valuation and acquiring firm performance in the short and long term: Out-of-sample evidence from Spain

Market valuation and acquiring firm performance in the short and long term: Out-of-sample evidence from Spain

Post-Merger Returns in Frontier Markets, or How We Learned to Stop Worrying and Love the Acquirers

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