An Analysis of Gains to US Acquiring REIT Shareholders in Domestic and Cross-Border Mergers before and after the Subprime Mortgage Crisis
Autor: | Yu-Hong Liu, Yu Chen Chang, Alan T. Wang |
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Jazyk: | angličtina |
Rok vydání: | 2018 |
Předmět: |
Geography
Planning and Development lcsh:TJ807-830 lcsh:Renewable energy sources Sample (statistics) Monetary economics subprime mortgage crisis Management Monitoring Policy and Law Shareholder Abnormal return Real estate investment trust 0502 economics and business 050207 economics Subprime mortgage crisis health care economics and organizations lcsh:Environmental sciences event study merger lcsh:GE1-350 050208 finance Renewable Energy Sustainability and the Environment lcsh:Environmental effects of industries and plants 05 social sciences Event study Building and Construction lcsh:TD194-195 Value (economics) Business Database transaction |
Zdroj: | Sustainability Volume 10 Issue 12 Sustainability, Vol 10, Iss 12, p 4586 (2018) |
ISSN: | 2071-1050 |
DOI: | 10.3390/su10124586 |
Popis: | This paper examines the abnormal returns of acquiring real estate investment trusts (REITs) around the announcement of acquisitions before and after the subprime mortgage crisis. Based on 182 domestic and cross-border US REIT acquisition announcements from 2005 to 2010, the acquiring trusts experienced a 0.73% abnormal return, on average. When the sample was divided into pre-crisis, crisis, and after-crisis subsamples, the acquiring trusts enjoyed the largest abnormal returns (1.86%) for domestic acquisitions during the crisis period. Before the crisis, when the acquisition was cross-border, the target was private, or the transaction was cash-financed, the acquiring trust experienced larger abnormal returns. During the crisis period, the acquiring trust gained larger abnormal returns when the transaction value was larger. After the crisis period, the acquiring trust achieved less abnormal returns in cross-border mergers. For both pre- and after-crisis periods, the shareholders of the acquirer enjoyed larger abnormal returns when the mergers were cash-financed, regardless of whether the target was public or privately held. Neither the blockholder monitoring nor the signaling hypothesis can explain such value gains. The structural changes in the acquirer&rsquo s abnormal returns are possibly due to the increased risk aversion of the market participants following the crisis. |
Databáze: | OpenAIRE |
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