Partial acquisitions, corporate control, and performance

Autor: Aigbe Akhigbe, Jeff Madura, Carolyn Spencer
Rok vydání: 2004
Předmět:
Zdroj: Applied Financial Economics. 14:847-857
ISSN: 1466-4305
0960-3107
DOI: 10.1080/09603100410001685349
Popis: A partial acquisition represents a unique form of corporate restructuring because it alters the ownership structure of two entities (in opposite ways), and therefore alters the form of control over the target's management. The proportion of the partial target that is owned by other shareholders is reduced by the increase in ownership by the partial acquirer. Yet, the transaction is unique in that the target firm continues as a going concern. Therefore, the target can be evaluated over time to determine the impact of the restructuring. Given the shift in ownership structure and control over the partial target, the performance of partial targets could be affected. It is found that while the partial targets experience favourable valuation effects at the time of the announcement, there is no evidence of unusual long-term performance beyond the initial announcement effects. Therefore, the realized benefits to the partial target due to improved monitoring by the partial acquirer are limited on average to the in...
Databáze: OpenAIRE
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