Target's organisational form and returns to Australian bidders in cross-border acquisitions

Sisira Reginold Nishantha Colombage, Abeyratna Gunasekarage, Syed Mohammod Mostofa Shams

    Research output: Contribution to journalArticleResearchpeer-review

    12 Citations (Scopus)

    Abstract

    We present large sample evidence on return performances of Australian cquirers who bid for public and private targets in cross-border acquisitions. While placing a particular emphasis on the method of payment and the shareholder protection offered by the target country, we analyse the impact of various bid, firm and foreign-acquisition-specific characteristics on bidding firms abnormal returns. We find that Australian investors perceive crossborder acquisitions as value-creating exercises regardless of the organisational form of the target acquired. However, bidders for private targets earn higher return when the method of payment is stock and the targets are located in high investor protection countries. We further find that the abnormal returns are conditional to the relative size of the target, bid frequency, target country destination and the preacquisition financial performance of bidding firms.
    Original languageEnglish
    Pages (from-to)1063 - 1091
    Number of pages29
    JournalAccounting & Finance
    Volume54
    Issue number4
    DOIs
    Publication statusPublished - 2014

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