A note on takeover success prediction

Branch, Ben S.; Wang, Jia; Yang, Taewon

doi:10.1016/j.irfa.2007.07.003

Cited by 27 publications

(27 citation statements)

References 10 publications

(10 reference statements)

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“…Target management resistance is another contingent factor influencing abandonment (Branch, Wang, & Yang, 2008;Muehlfeld et al, 2007). Such resistance is linked to a number of factors, such as the means of payment and the presence of rival bids (Kummer & Steger, 2008).…”

Section: Data Collection and Variable Measurementmentioning

confidence: 99%

Managerial and Disciplinary Responses to Abandoned Acquisitions in Bidding Firms: A New Perspective

McCann

Ackrill²

2015

Corporate Governance

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Manuscript Type: Empirical Research Question/Issue: Existing research suggests that internal and external corporate governance mechanisms substitute for one another to mitigate agency problems in bidding firms. This paper tests whether the interaction between these mechanisms is more complementary. Research Findings/Insights: While there is evidence for disciplinary responses to bids for unrelated targets involving strategic retrenchment and significant asset divestment, the influence of the information conveyed by this characteristic on the likelihood of post-abandonment discipline is not amplified when boards are less independent. Theoretical/Academic Implications: The results suggest that certain characteristics are used to distinguish between abandoned bidders which require discipline and those that do not. However, our findings do not suggest that interaction between internal and external governance mechanisms is contingent on board independence. Instead, these interactions between shareholders and boards seem to be contingent on a range of company, industry, and situation-specific factors. Practitioner/Policy Implications: While policy in the UK has focused on board independence as a means of effective corporate governance, our results suggest that this is not a panacea. Effective governance involves active owners, communicating their interests to boards, and boards responding accordingly. Further encouragement of such communication before, during, and after acquisitions will improve signals to managers that shareholders can target the necessary discipline of those whom they perceive to need it most.

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Section: Data Collection and Variable Measurementmentioning

confidence: 99%

Managerial and Disciplinary Responses to Abandoned Acquisitions in Bidding Firms: A New Perspective

McCann

Ackrill²

2015

Corporate Governance

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“…Branch et al . () also investigated the US takeover cases by comparing two techniques (the logistic regression model and artificial neural network technology) from 1991 to 2004.…”

Section: Methodsmentioning

confidence: 99%

“…To investigate the impact of various factors on the probability of takeover success, Branch and Yang (2003) generated estimates using the same model. Branch et al (2008) also investigated the US takeover cases by comparing two techniques (the logistic regression model and artificial neural network technology) from 1991 to 2004.…”

Section: The Logit Modelmentioning

confidence: 99%

“…The only difference in the magnitude of the estimate values is due to the different assumptions the models incorporate about the probability distributions. Six significant explanatory variables were uncovered in empirical studies by Baker and Savasoglu (2002), Branch and Yang (2003), Jindra and Walkling (2004) and Branch et al (2008): bid premium, relative size of target and acquiring firms, shares controlled by the bidder, payment methods, target resistance and transaction size. Because information about the last two variables is not publicly available in Taiwan, as is often the case in emerging countries, we use only the former four variables in the qualitative models.…”

Section: The Probit Modelmentioning

confidence: 99%

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An Option‐Based Approach to Risk Arbitrage in Emerging Markets: Evidence from Taiwan Takeover Attempts

Lin

Lan

Chuang

2012

Journal of Forecasting

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Predicting the accuracy rate of takeover completion is the major key to risk arbitrage returns. In emerging markets, data on takeover attempts are either unavailable or of poor quality. Therefore, this paper proposes an option‐based approach to improve the accuracy of prediction. Empirical research on Taiwan takeovers shows that by this approach, the accuracy rate is 71.15%—considerably higher than the average of 54.81% using qualitative models. There exist, on average, three opportunities to close arbitrage positions, at a time before completion dates, when the target and acquiring stock prices converge. The annualized abnormal return is 42.19% greater than it would otherwise be. Copyright © 2012 John Wiley & Sons, Ltd.

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“…In the west, the relevant studies become an important subject, which has attracted considerable attention in the literatures [2] . But, the takeover in different economic background has different characteristics, therefore the study need to consider the effects from economic environments.…”

Section: Introductionmentioning

confidence: 99%

An empirical study of characteristics of takeover targets from Chinese capital Market

2011

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This paper constructs a multi-variables logistic model to study characteristics of takeover targets from Chinese capital Market. The theoretical model indicates that Chinese takeover has specific characteristics. The empirical results show that the firm size, net operating loss of target firm and the ownership structure could affect the takeover decision. Specially, the larger proportion of first shareholding and higher concentration are useful to achieve company takeover. However, the effect of tax preference on takeover is not obvious, because the income tax preferences are widespread for Chinese listed companies.

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A note on takeover success prediction

Cited by 27 publications

References 10 publications

Managerial and Disciplinary Responses to Abandoned Acquisitions in Bidding Firms: A New Perspective

Managerial and Disciplinary Responses to Abandoned Acquisitions in Bidding Firms: A New Perspective

An Option‐Based Approach to Risk Arbitrage in Emerging Markets: Evidence from Taiwan Takeover Attempts

An empirical study of characteristics of takeover targets from Chinese capital Market

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