Are the Busiest Really the Best? Further Evidence from Frequent Acquirers

Posted: 27 May 2013

See all articles by Narjess Boubakri

Narjess Boubakri

American University of Sharjah - School of Business and Management; HEC Montreal - Department of Finance

Andrew Chan

Independent

Maher Kooli

University of Quebec at Montreal (UQAM) - School of Management (ESG)

Date Written: 2012

Abstract

We reexamine the announcement returns for a sample of 4215 U.S. frequent acquirers making 3299 domestic and 916 cross-border acquisitions of public, private and/or subsidiary targets between 1999 and 2010. We find that the market has a much stronger reaction to fifth or higher bids and that acquisitions made during the speculative bubble enjoyed higher returns than those made after the Nasdaq closed at its all-time high. Our cross-sectional analysis also shows a strong negative cross-border effect over the entire period of our sample suggesting. This suggests that better targets were domestic rather than foreign, which may reflect the fact that profitable foreign opportunities have become costlier after the Internet craze. Further, we find that acquirer returns are lower for countries in which investor protection, external conflict and ethnic tensions risks are high.

Keywords: Frequent, Acquirers, Announcement

JEL Classification: G28, G32, G34

Suggested Citation

Boubakri, Narjess and Chan, Andrew and Kooli, Maher, Are the Busiest Really the Best? Further Evidence from Frequent Acquirers (2012). Journal of Multinational Financial Management, Vol. 22, No. 1-2, 2012. Available at SSRN: https://ssrn.com/abstract=2270628

Narjess Boubakri

American University of Sharjah - School of Business and Management ( email )

P.O. Box 26666
Sharjah
United Arab Emirates

HOME PAGE: http://www.aus.edu

HEC Montreal - Department of Finance ( email )

3000 Chemin de la Cote-Sainte-Catherine
Montreal, Quebec H3T 2A7
Canada

Andrew Chan

Independent ( email )

Maher Kooli (Contact Author)

University of Quebec at Montreal (UQAM) - School of Management (ESG) ( email )

315 rue Sainte-Catherine Est
Montreal, Quebec H3X 3X2
Canada
514 987 3000, 2082 (Phone)
514 987 0422 (Fax)

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