Abstract
Purpose – The purpose of this study is to examine whether the acquirers of private targets outperform their peers that acquire public targets in the long run. Design/methodology/approach – Using two samples of acquirers of private and public targets, this paper analyses their short-run market performance and long-run operating performance. Univariate analyses and multiple regressions are used to analyse abnormal stock returns and abnormal cash flow performances of bidders. Findings – Acquirers of private targets earn significantly higher abnormal return than acquirers of public targets during the announcement period. Similarly, the long-run operating performance of acquirers of private targets is significantly higher than that of the acquirers of public targets. However, the performance difference between two groups is more pronounced when cash flows are scaled by the market value of acquirers. Originality/value – This is the first Australian study to examine whether the long-run operating performance of acquirers depends on the organisational form of the target acquired.
| Original language | English |
|---|---|
| Pages (from-to) | 38-58 |
| Number of pages | 21 |
| Journal | Pacific Accounting Review |
| Volume | 28 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 1 Feb 2016 |
Keywords
- Abnormal return
- Acquirers of private targets
- Acquirers of public targets
- Industry
- Long-term operating performance
- Mergers and acquisitions
- Size and performance-adjusted cash flow return
Cite this
}
Private public distinction of the target and the long run operating performance of acquirers. / Shams, Syed M.M.; Gunasekarage, Abeyratna.
In: Pacific Accounting Review, Vol. 28, No. 1, 01.02.2016, p. 38-58.Research output: Contribution to journal › Article › Research › peer-review
TY - JOUR
T1 - Private public distinction of the target and the long run operating performance of acquirers
AU - Shams, Syed M.M.
AU - Gunasekarage, Abeyratna
PY - 2016/2/1
Y1 - 2016/2/1
N2 - Purpose – The purpose of this study is to examine whether the acquirers of private targets outperform their peers that acquire public targets in the long run. Design/methodology/approach – Using two samples of acquirers of private and public targets, this paper analyses their short-run market performance and long-run operating performance. Univariate analyses and multiple regressions are used to analyse abnormal stock returns and abnormal cash flow performances of bidders. Findings – Acquirers of private targets earn significantly higher abnormal return than acquirers of public targets during the announcement period. Similarly, the long-run operating performance of acquirers of private targets is significantly higher than that of the acquirers of public targets. However, the performance difference between two groups is more pronounced when cash flows are scaled by the market value of acquirers. Originality/value – This is the first Australian study to examine whether the long-run operating performance of acquirers depends on the organisational form of the target acquired.
AB - Purpose – The purpose of this study is to examine whether the acquirers of private targets outperform their peers that acquire public targets in the long run. Design/methodology/approach – Using two samples of acquirers of private and public targets, this paper analyses their short-run market performance and long-run operating performance. Univariate analyses and multiple regressions are used to analyse abnormal stock returns and abnormal cash flow performances of bidders. Findings – Acquirers of private targets earn significantly higher abnormal return than acquirers of public targets during the announcement period. Similarly, the long-run operating performance of acquirers of private targets is significantly higher than that of the acquirers of public targets. However, the performance difference between two groups is more pronounced when cash flows are scaled by the market value of acquirers. Originality/value – This is the first Australian study to examine whether the long-run operating performance of acquirers depends on the organisational form of the target acquired.
KW - Abnormal return
KW - Acquirers of private targets
KW - Acquirers of public targets
KW - Industry
KW - Long-term operating performance
KW - Mergers and acquisitions
KW - Size and performance-adjusted cash flow return
UR - http://www.scopus.com/inward/record.url?scp=85045623924&partnerID=8YFLogxK
U2 - 10.1108/PAR-02-2014-0004
DO - 10.1108/PAR-02-2014-0004
M3 - Article
VL - 28
SP - 38
EP - 58
JO - Pacific Accounting Review
JF - Pacific Accounting Review
SN - 0114-0582
IS - 1
ER -