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Returns to Acquirers of Listed and Unlisted Targets

41 Pages Posted: 4 Jan 2005  

Mara Faccio

Purdue University - Krannert School of Management; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER)

John J. McConnell

Purdue University

David Stolin

Toulouse Business School - Economics and Finance

Multiple version iconThere are 2 versions of this paper

Date Written: November 2004

Abstract

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.

Keywords: Mergers and acquisitions

JEL Classification: G34

Suggested Citation

Faccio, Mara and McConnell, John J. and Stolin, David, Returns to Acquirers of Listed and Unlisted Targets (November 2004). Available at SSRN: https://ssrn.com/abstract=642063 or http://dx.doi.org/10.2139/ssrn.642063

Mara Faccio (Contact Author)

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
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National Bureau of Economic Research (NBER) ( email )

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European Corporate Governance Institute (ECGI)

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Belgium

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National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER) ( email )

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Singapore, 117592
Singapore

John McConnell

Purdue University ( email )

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765-494-5910 (Phone)
765-494-7863 (Fax)

David Stolin

Toulouse Business School - Economics and Finance ( email )

20, bd Lascrosses - BP 7010
Toulouse Cedex 7, 31068
France

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