Returns to Acquirers of Listed and Unlisted Targets
Purdue University - Krannert School of Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)
John J. McConnell
Toulouse Business School - Economics and Finance
We examine announcement period abnormal returns to acquirers of listed and unlisted targets in 17 Western European countries over the interval 1996-2001. Acquirers of listed targets earn an insignificant average abnormal return of -0.38%, while acquirers of unlisted targets earn a significant average abnormal return of 1.48%. This listing-related factor in acquirers' returns persists through time and across countries and remains after controlling for the method of payment for the target, the acquirer's size and Tobin's Q, pre-announcement leakage of information about the transaction, whether the acquisition created a blockholder in the acquirer's ownership structure, whether the acquisition was a cross-border deal, and other variables. The fundamental factors that give rise to this listing-related effect, which has also been documented in US acquisitions, remain elusive.
Number of Pages in PDF File: 41
Keywords: Mergers and acquisitions
JEL Classification: G34
Date posted: January 4, 2005
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