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open-access-imgOpen AccessShort- And Long-Term Wealth Gains From UK Takeovers: The Case Of The Financial Industry
Author(s)
Sabri Boubaker,
Taher Hamza
Publication year2014
Publication title
journal of applied business research
Resource typeJournals
PublisherClute Institute
The present study analyzes the short- and long-term performance of UK financial acquiring firms by examining a sample of 40 takeovers over the period 19962007. In particular, it investigates i) the short- and long-term stock return performance of these acquiring firms and ii) the relation between their short-term abnormal return around the announcement date of takeovers and their long-term performance. The event study methodology shows that bidders experience significant short-term wealth destruction. In contrast, both the buy-and-hold abnormal returns and bidders portfolio return approaches indicate positive and significant wealth effects over the long run. Business cycle analysis shows that acquirers obtain significantly higher returns during downward financial market cycles. Furthermore, the results show that the market reaction to the bid announcement better predicts bidders long-term performance in the case of positive short-term abnormal returns.
Subject(s)abnormal return , biology , business , chemistry , chromatography , context (archaeology) , economics , engineering , event study , finance , financial economics , holding period return , investment performance , mechanical engineering , microeconomics , monetary economics , paleontology , physics , portfolio , production (economics) , quantum mechanics , return on investment , sample (material) , stock (firearms) , stock exchange , term (time)
Language(s)English
SCImago Journal Rank0.149
H-Index22
ISSN0892-7626
DOI10.19030/jabr.v30i4.8673

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