The Abandonment of Major Mergers in the U.K. 1965-75

Rhetoric, argument and impression management in hostile takeover defence documents

“…Similarly, offer rejection notifications relating to contested bids were excluded. A contested takeover bid is defined as one in which there are multiple bidders for the same target at the same time, where target company management is not necessarily opposed to takeover (Pickering, 1978;Holl & Pickering, 1988;Parkinson & Dobbins, 1993). The third stage excludes offer rejection notifications which relate to the same hostile takeover bid.…”

Getting cold feet?

“…Perhaps because small organizations do not try to resist the wishes of the larger organizations, especially if it is a hostile takeover, whereas equally sized organizations collide over merger conditions. Furthermore, Pickering (1978) found that merger abandonment is more likely if both organizations are large. Therefore, we expect the following: 9.…”

“…Much less attention is paid to cases where organizations intend to merge but eventually decide to abandon the merger, although studies estimate that between 11% and 28% of all merger cases across industries are abandoned (Madura & Ngo, 2012;Pickering, 1978). From a societal viewpoint, merger abandonment may have positive or negative consequences (Akhigbe, Borde, & Whyte, 2000;Liu, 2012 Sullivan, 2001).…”

Disclosure of profit forecasts during takeover bids

“…Newbould (1970) and Buckley (1972) classified takeovers and mergers as agreed/unopposed, defended (where the directors oppose the bid and recommend its rejection to the shareholders of the target company) and competitive (where there are rival bidders). Pickering (1978), Holl and Pickering (1988) and Franks and Harris (1989) defined a contested bid as one where there were two or more bidders for the same target. Limmack (1993) categorised each acquisition into one of three categories ('competing', 'contested', 'uncontested') according to whether there was evidence of bid resistance or not.…”

“…Further analysis has shown that the characteristics of targets differ depending on whether the takeover bid is friendly or hostile (Merck, Shleifer and Vishney, 1988). Some researchers have examined factors relating to successful and failed or abandoned mergers (Pickering, 1978 andTaffler and Holl, 1991;Limmack, 1994) and have found significant differences influencing the outcome of the bid.…”