Corporate Take - Overs in Malaysia: Market - Based Assessments
17 Pages Posted: 20 Sep 2009
Date Written: September 4, 2009
This study seeks to assess the take-over performance of the Malaysian public listed companies, using the market-based event study method. It also aims to examine managerial motives for take-overs, take-over transaction characteristics and ownership characteristics to infer any possible sources of value creation or possible agency conflicts that could have a profound impact upon announcements of the combined firms.
It was found the cumulative average abnormal returns (CAR) were significantly positive around the announcement dates of a take-over. The results show that agency related issues, namely ownership concentration and related party transaction, had greater explanatory power for take-over performance than the managerial motives for efficiency and transaction characteristics. The negative impact of concentrated ownership and related party transaction implies that the market perceived that large shareholders of the acquiring firm might entrench themselves by acquiring their own companies.
Keywords: Take-overs, event study, performance, motives, ownership, Malaysia
JEL Classification: G1, G3
Suggested Citation: Suggested Citation