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The Effect Of Full Takeovers On Corporate Performance
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Book Synopsis The Effect of Full Takeovers on Corporate Performance by : Lydia J. Segara
Download or read book The Effect of Full Takeovers on Corporate Performance written by Lydia J. Segara and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates whether corporate takeovers create value and examines the effect of full takeovers on the financial performance of the combined firm in the post-takeover period. A sample of 95 Australian takeovers over a twenty-two year period between 1979 and 2000 was employed. The sample was made up of Australian publicly listed industrial firms. Bidder firms that are private or foreign were excluded. In addition, firms in sectors other than industrials were not included because of noncomparability of accounting methods. Nine performance measures were used and comprised of six financial performance measures: three profitability (accrual) measures as well as three operating cash flow measures, one asset turnover measure and two debt/financial leverage measures. These nine performance measures used are (1) Return on assets, (2) Return on equity, (3) Earnings before interest and tax profit margin, 4) Operating cash flow on total assets, (5) Operating cash flow on sales, (6) Operating cash flow on total equity, (7) Asset turnover, (8) Total liabilities on total assets and (9) Total liabilities on total equity. A five year window on either side of the event year was used to examine any changes for each of the nine post-takeover performance measures. A method similar to that used by Healy, Palepu and Ruback (1992) was undertaken, where industry benchmarks was used to control for market-wide and industry-specific effects. For each of the nine performance measures, industry adjusted figures were calculated by subtracting the industry benchmarks from the combined firm performance both in the post and pre-takeover periods. Differences between the post- and pre- takeover industry adjusted performance measures based on the change model were analysed. Several extended cross-sectional regression analysis was performed as the regression model factored in any persistence in the pre-takeover performance measure. Explanatory variables used in the regression models include (i) the relative size of the acquisition; (ii) the method of financing; (iii) the degree of industry relatedness for the takeover; and (iv the degree of takeover hostility. Similar findings are reported by both the change and regression models; in that financial performance measures showed declines in the post-takeover period. The size of the acquisition and stock financing had a positive correlation with all six financial performance measures in the post-takeover period, however an inverse relationship was found for hostile takeovers. Based on the empirical evidence presented in this thesis, it appears that corporate takeovers in Australia do not lead to improved financial performance. The results of this thesis is not consistent with the synergy hypothesis, but is interpreted as providing support for the agency and the hubris hypotheses.
Book Synopsis Public Policy Toward Corporate Takeovers by : Murray L. Weidenbaum
Download or read book Public Policy Toward Corporate Takeovers written by Murray L. Weidenbaum and published by Transaction Publishers. This book was released on with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume examines critical issues in the debate over the effects' of the current wave of corporate takeovers. Media accounts are often sensational, but proposed public policy remedies need to be evaluated on the basis of more than simple rhetoric. The studies contained in this collection provide solid economic grounding for the debate. Public Policy Toward Corporate Takeovers is the result of extensive research sponsored by the Center for the Study of American Business and directed by Murray Weidenbaum; it examines key aspects of takeovers: the evolving regulatory role of the Antitrust Division, state versus federal authority over offensive and defensive takeover maneuvers, whether leveraged buyouts improve the firm's economic performance, and the validity of assertions about "entrenched" managements. The book also includes the views of the most publicized corporate raider, T. Boone Pickens. Balancing Pickens' highly favorable view of the value of hostile takeovers as a disciplining factor for subpar management performance is a chapter by David Ravenscraft of the Federal Trade Commission, who takes a long-term viewpoint and argues that the popular belief that takeovers create substantial efficiencies has not been borne out by the record. The overall findings do not fully support either side of the takeover controversy. The book presents both legal and economic perspectives, and suggests strategies for government policymakers as well as leaders of private enterprise.
Book Synopsis Corporate Takeovers by : Alan J. Auerbach
Download or read book Corporate Takeovers written by Alan J. Auerbach and published by University of Chicago Press. This book was released on 2013-12-30 with total page 354 pages. Available in PDF, EPUB and Kindle. Book excerpt: The takeover boom that began in the mid-1980s has exhibited many phenomena not previously observed, such as hostile takeovers and takeover defenses, a widespread use of cash as a means of payment for targeted firms, and the acquisitions of companies ranking among the largest in the country. With the aim of more fully understanding the implications of such occurances, contributors to this volume consider a broad range of issues as they analyze mergers and acquisitions and study the takeoveer process itself.
Book Synopsis Hostile Takeovers, Corporate Governance and Performance by : Mai Mohamad Daher
Download or read book Hostile Takeovers, Corporate Governance and Performance written by Mai Mohamad Daher and published by . This book was released on 2006 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt: Hostile takeovers usually signal the presence of weaknesses and inefficiencies i n a corporation. Recent studies have shown that most hostile takeovers result fr om a firm's weak governance mechanisms and very severe agency problems, resultin g in managers reaping benefits at the expense of shareholders. In this paper we examine the relationship between failed hostile takeover attempts and corporate governance. It's been shown in the literature that managers who take a defensive approach towards a takeover threat typically raise their debt level. Debt is sa id to commit managers to introducing the changes that the raider would have intr oduced through undertaking corporate refocusing, and is found to have a positive effect on subsequent market performance. In this study, we examine the role of corporate governance as a defense mechanism and whether alarmed managers typical ly improve their firms' governance, a step that potential raiders would logicall y undertake. We find that in most cases governance is either unchanged or gets w orse, a fact that doesn't seem to affect corporate performance that improves for the bigger part of our sample regardless of governance changes.
Book Synopsis The Effects of Takeover Threat on Corporate Performance by : Ann Kathryn Buchholtz
Download or read book The Effects of Takeover Threat on Corporate Performance written by Ann Kathryn Buchholtz and published by . This book was released on 1991 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Deal Decade by : Margaret M. Blair
Download or read book The Deal Decade written by Margaret M. Blair and published by Brookings Institution Press. This book was released on 1993 with total page 416 pages. Available in PDF, EPUB and Kindle. Book excerpt: U.S. companies are still reeling from the takeovers, leveraged buyouts, junk bond issues, re-capitalizations, and other financial restructuring transactions that reshaped corporations in the 1980s. In this book, distinguished economists and scholars in the business administration, management, and law discuss how those transactions affected corporate management and the financial markets. The authors examine why so much corporate restructuring occurred and, particularly, what corporate governance problems were behind it. They evaluate the causes and effects of restructuring, the economic, political, and legal environment that encouraged it, and the new laws and court rulings that resulted. The contributors explain that financial restructuring was driven by a dispute over who should control large public corporations, what their goals should be, to whom the organizations and their managers should be accountable, and how to make them more accountable. Although the wave of financial restructuring itself has subsided, this conflict remains unsolved and will continue to influence the business climate. The Deal Decade addresses such issues as: Why did long-dormant questions about corporate performance and governance surface in the 1980s? Why did they manifest themselves in takeovers and financial restructurings? Why would capital structure be likely to affect corporate performance? Were the increased use of debt and rapid pace of innovation in financial markets, and the explosion in takeover activity independent phenomena or related? And if related, which caused which? Finally, why did the impulse to restructure subside without having resolved the controversies that underlay it?
Book Synopsis The Impact of Merger and Acquisition Activities on Corporate Performance Measured on an Accounting and Market Base by : Malwina Woznik
Download or read book The Impact of Merger and Acquisition Activities on Corporate Performance Measured on an Accounting and Market Base written by Malwina Woznik and published by . This book was released on 2013-08 with total page 118 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2013 in the subject Business economics - Controlling, grade: 1,3, University of Cologne (Seminar fur allgemeine BWL und Controlling), language: English, abstract: "Warren Buffett swallows Heinz: Sauce for the sage" - a typical takeover announcement was published lately on 14th February 2013. Warren Buffett, a well known inves tor, acquired along with the financial investor 3G Capital the H. J. Heinz Company for $ 28 billion. This is likely to become the largest transaction in the food industry. The company's stock price rose more than 20.0 percent after the publication which is a very characteristic reaction to deal announcements. Hence, the important question is, if transactions, such as the takeover of the H. J. Heinz Company, affect the corporate performance consistently. In general, the core idea about mergers and acquisitions (M&A) is to generate additional future growth if for example organic growth is limited. If two companies merge or a target is bought by another company (the acquirer), shareholders believe in synergy effects. These are revenue enhancements, cost reductions, tax gains and reduced capital requirements leading to business growth and thus to a higher value of the new company. However, it is questionable if this theory can also be experienced in the real world. Ever since the effects of M&A have been analysed, the market of the United States (US) was used as data source. This is plausible due to the fact that the very first information was well recorded for US companies. It is remarkable that literature contributes very little research on Europe, although the number of announced European transactions is comparable to those of the US. For example, in 2007 the European deals volume overtook the one from the United States of America (USA) for the first time. Moreover, research on single European countries almost never exists or only rarely. One exception is the United Kingdom (UK) with an early takeover history begin
Book Synopsis Knights, Raiders, and Targets by : John C. Coffee Jr.
Download or read book Knights, Raiders, and Targets written by John C. Coffee Jr. and published by Oxford University Press. This book was released on 1988-06-23 with total page 560 pages. Available in PDF, EPUB and Kindle. Book excerpt: Fascinating as the corporate takeovers of recent years have been--with their "golden parachutes" and junk bonds, "greenmailers" and white knights--it is far from clear what underlying forces are at work, and what their long-term consequences will be. Debate over these questions has become polarized: some see takeover threats as disciplinary mechanisms that induce managers to behave efficiently and move assets to higher valued uses or into the hands of more efficient managers; others claim that corporate raiders have produced few observable increases in operating efficiency, but rather have disrupted business planning, enforced a preoccupation with the short-term, and tilted the balance sheets of corporate America towards dangerously high debt levels. Such sharp conflicts in theory and evidence have produced considerable governmental confusion concerning the appropriate policy response. Scores of bills have been introduced in Congress, but legislators are no more in agreement than scholars. Knights, Raiders, and Targets represents one of the first sustained efforts to refine and clarify these issues. Based on papers presented at a symposium sponsored by the Columbia Law School's Center for Law and Economic Studies, it also includes discussion of the informal presentations made at the symposium by the CEOs of several major corporations. This important book airs new theories and offers vital and exciting discussion of the essential issues attached to an event that has become central to American corporate culture.
Download or read book The Deal Decade written by Margaret Blair and published by Brookings Institution Press. This book was released on 2010-12-01 with total page 407 pages. Available in PDF, EPUB and Kindle. Book excerpt: U.S. companies are still reeling from the takeovers, leveraged buyouts, junk bond issues, re-capitalizations, and other financial restructuring transactions that reshaped corporations in the 1980s. In this book, distinguished economists and scholars in the business administration, management, and law discuss how those transactions affected corporate management and the financial markets. The authors examine why so much corporate restructuring occurred and, particularly, what corporate governance problems were behind it. They evaluate the causes and effects of restructuring, the economic, political, and legal environment that encouraged it, and the new laws and court rulings that resulted. The contributors explain that financial restructuring was driven by a dispute over who should control large public corporations, what their goals should be, to whom the organizations and their managers should be accountable, and how to make them more accountable. Although the wave of financial restructuring itself has subsided, this conflict remains unsolved and will continue to influence the business climate. The Deal Decade addresses such issues as: Why did long-dormant questions about corporate performance and governance surface in the 1980s? Why did they manifest themselves in takeovers and financial restructurings? Why would capital structure be likely to affect corporate performance? Were the increased use of debt and rapid pace of innovation in financial markets, and the explosion in takeover activity independent phenomena or related? And if related, which caused which? Finally, why did the impulse to restructure subside without having resolved the controversies that underlay it?
Book Synopsis Takeovers, Restructuring, and Corporate Governance by : John Fred Weston
Download or read book Takeovers, Restructuring, and Corporate Governance written by John Fred Weston and published by . This book was released on 2001 with total page 728 pages. Available in PDF, EPUB and Kindle. Book excerpt: The takeover process - The legal and regulatory framework - Accounting for M & As - Tax planning options - Strategic processes - Theories of mergers and tender offers - A chemical industry case study - Measurement of abnormal returns - The timing of merger activity - Empirical tests of M & A performance - Alternative approaches to valuation - Foundations of DCF spreadsheet valuation - Derivation of revenue growth valuation formulas - Derivation of investment opportunity valuation formulas - Increasing the value of the organization - Restructuring and divestitures - Restructuring organization and ownership relationships - Financial restructuring - Joint ventures and alliances - ESOPs and MLPs - Going private and leveraged buyouts - International takeovers and restructuring Share repurchade - Takeover defenses - Corporate governance and performance - Implementation and management guides for M & As.
Book Synopsis Debt, Debt Structure and Corporate Performance After Unsuccessful Takeovers by :
Download or read book Debt, Debt Structure and Corporate Performance After Unsuccessful Takeovers written by and published by . This book was released on 2004 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Predators' Ball by : Connie Bruck
Download or read book The Predators' Ball written by Connie Bruck and published by Simon & Schuster. This book was released on 2020-02-04 with total page 400 pages. Available in PDF, EPUB and Kindle. Book excerpt: “Connie Bruck traces the rise of this empire with vivid metaphors and with a smooth command of high finance’s terminology.” —The New York Times “The Predators’ Ball is dirty dancing downtown.” —New York Newsday From bestselling author Connie Bruck, The Predators’ Ball dramatically captures American business history in the making, uncovering the philosophy of greed that dominated Wall Street in the 1980s. During the 1980s, Michael Milken at Drexel Burnham Lambert was the Billionaire Junk Bond King. He invented such things as “the highly confident letter” (“I’m highly confident that I can raise the money you need to buy company X”) and the “blind pool” (“Here’s a billion dollars: let us help you buy a company”), and he financed the biggest corporate raiders—men like Carl Icahn and Ronald Perelman. And then, on September 7, 1988, things changed... The Securities and Exchange Commission charged Milken and Drexel Burnham Lambert with insider trading and stock fraud. Waiting in the wings was the US District Attorney, who wanted to file criminal and racketeering charges. What motivated Milken in his drive for power and money? Did Drexel Burnham Lambert condone the breaking of laws?
Book Synopsis Hostile Takeovers by : Tim Jenkinson
Download or read book Hostile Takeovers written by Tim Jenkinson and published by McGraw-Hill Companies. This book was released on 1994 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many organizations find themselves open to a hostile takeover bid and this book, with a comprehensive case study approach, offers an understanding of what can happen, why and how to manoeuvre from under a hostile takeover.
Book Synopsis Symposium on Managerial Incentives and Corporate Performance: Effects of Executive Compensation, Organzational Structure, Takeovers, and Government Policy by : Ray Ball
Download or read book Symposium on Managerial Incentives and Corporate Performance: Effects of Executive Compensation, Organzational Structure, Takeovers, and Government Policy written by Ray Ball and published by . This book was released on 1993 with total page 380 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Post-Merger Performance of Corporate Takeovers by : Sherry L. Jarrell
Download or read book The Post-Merger Performance of Corporate Takeovers written by Sherry L. Jarrell and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Event studies on announcement-period stock returns have found that takeovers are expected to improve firm performance, yet the dominant finding in the existing literature on post-takeover long-term performance is that mergers destroy corporate value. This paper examines this apparent contradiction by developing a new benchmark methodology which is based on forecasts of performance and a control portfolio matched to the event firms on the basis of expected future performance and other exogenous variables. This benchmark captures what the performance of the bidder and target firms would have been had the merger not occurred, and controls for many of the inherent problems due to endogeneity (of the decision to merge) found with other approaches taken in the literature. I find that the long- term post-takeover performance of the merged firm is better than it would have been without the merger. The method is verified by examining the performance of a portfolio of canceled takeovers, where no effect is found.
Book Synopsis The Effect of Mergers and Acquisitions on Corporate Performance in Pharmaceutical Industry by : Yazid Jawabrah
Download or read book The Effect of Mergers and Acquisitions on Corporate Performance in Pharmaceutical Industry written by Yazid Jawabrah and published by . This book was released on 2006 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Corporate Takeovers, Firm Performance, and Board Composition by : Omesh Kini
Download or read book Corporate Takeovers, Firm Performance, and Board Composition written by Omesh Kini and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the relationship between corporate takeovers and the hoard of directors as alternative control mechanisms to discipline top management. Previous research shows that CEO turnover subsequent to corporate takeovers is inversely related to pre-takeover market-related performance. We find this relation is concentrated in targets with insider-dominated boards of directors. Our results support the notion that, as an alternative control device, takeovers serve as a quot;substitutequot; for outside directors. Further, we show that the discipline associated with corporate takeovers extends beyond top management to effect restructuring of the entire board. The nature of the discipline depends on the composition of the target board prior to the takeover. Disciplinary takeovers result in two general effects: (1) for inside-dominated targets, the number of inside directorships decreases while the number of outside directorships remains about the same; and (2) for outside-dominated boards, the number of inside directorships increases while the number of outside directorships decreases. As a result, the board is recomposed toward a more even balance between inside and outside directorships.
