Description
Book SynopsisThe term "takeover", of which the first form is mergers and acquisitions (M&A), refers to the transfer of control of a business from one group of shareholders to another. Considering the importance of this issue and the real drives behind takeovers, it has become imperative to identifying companies that are vulnerable to takeover by two types: tender offer and exchange offer.
This book thus presents the legal aspects, the theoretical justifications and the empirical contributions of takeovers, and analyzes the economic and financial characteristics of targets in order to assess the probability of being acquired. An empirical approach based on two quantitative studies is then applied to the European market, which is still virgin territory in terms of academic research. Finally, acquisition probability models have been developed and they have a 72% forecast accuracy average rate of targets.
Corporate Takeover Targets is aimed at students and researchers in economic and management, as well as M&A consultants.
Table of ContentsIntroduction ix
Part 1. Corporate Takeovers: Theoretical Justifications and Empirical Contributions 1
Introduction to Part 1 3
Chapter 1. Economic and Legal Framework of Takeover Bids in Europe 5
1.1. Corporate takeover: general description 6
1.1.1. The control 6
1.1.2. The takeover concept 8
1.1.3. Techniques and classification of M&A 9
1.1.4. Conclusion 14
1.2. The economic impact of takeover bids 15
1.2.1. Global development over the period 1990-2000 16
1.2.2. Characteristics of the recent M&A wave: 2001–2007 26
1.3. Regulation and control of takeover bids in Europe . 34
1.3.1. Merger and acquisition control in Europe 35
1.3.2. The role of public authorities 38
1.3.3. Harmonization of regulations on takeover bids within the European Union 42
1.4. Conclusion 46
Chapter 2. Motivations and Economic Role of Takeover Bids: a Theoretical and Empirical Characterization 49
2.1. Economic interpretation of takeover bids and plurality of their theoretical references 50
2.1.1. Economic justifications for takeover bids 50
2.1.2. Plurality of theoretical references on the potential effectiveness of takeover bids 60
2.1.3. Conclusion 67
2.2. Performance and effectiveness of takeover bids: results of empirical research 68
2.2.1. Short term performance of companies: around the event date 70
2.2.2. Long-term acquisition performance: bnormal post acquisition return 77
2.2.3. Conclusion 81
2.3. Motivations of takeover bids: results of empirical research 82
2.3.1. Empirical studies on targets profile 84
2.3.2. Empirical studies of acquiring companies’ profiles 98
2.3.3. Joint empirical studies of the profiles of acquirers and targets 100
Part 2. Exploration of Predictive Variables for Takeover Bids and Forecast of European Targets 105
Introduction to Part 2 107
Chapter 3. Detection of Predictive Variables for Corporate Takeover: an Exploratory Study 109
3.1. Conceptual and empirical framework: theoretical positioning, survey characteristics and choice of data analysis method 109
3.1.1. The theoretical positioning of the exploratory study 110
3.1.2. The questionnaire characteristics 111
3.1.3. Statistical analysis of responses 113
3.2. Results of empirical tests: exploratory factor analysis in principal components 114
3.2.1. Reliability and validity of the measurement scale 114
3.2.2. Qualitative analysis of responses 116
3.2.3. Results of the exploratory factor analysis of variables 122
3.2.4. Conclusion 132
Chapter 4. Developing a Takeover Prediction Model: The European Case 135
4.1. Empirical analysis: hypotheses, sample selection and statistical methodology 136
4.1.1. Formulation of hypotheses and measurement variables 136
4.1.2. Selection of samples and data collection 150
4.1.3. Methodological choices and statistical processing 156
4.1.4. Conclusion 161
4.2. Modeling takeover bids in Europe: predicting takeover targets 162
4.2.1. Univariate analysis results 163
4.2.2. Results of the multivariate analysis 176
4.2.3. Performance and predictive ability of the developed models 193
4.2.4. Conclusion 201
Conclusion 203
Bibliography 209
Index 221
