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Title: Empirical evidence on acquisition activities
Authors: Soongswang, Amporn
Keywords: acquisition, takeover, wealth gain, event study
Issue Date: 2013
Abstract: This study focuses on takeover activities on the Stock Exchange of Thailand (SET) and predominantly examines their effects on target and bidding firms. Even though there is more consensus about the net shareholders' wealth, especially nearly all of prior studies report the target firm shareholders' wealth gains, the evidence on bidding firm's shareholder returns is mixed. Thus, this research has been undertaken to explore this issue in a Thai context: whether or not takeovers result in positive or negative impact on the event firms' shareholders and subsequently their total gains. It is known that event study results are sensitive to the metrics used and therefore, the study investigates a long-window excess return, or during a period of twelve months before and after the announcements by means of a number of metrics. For example, the zero-one model was used to estimate the returns for the bid period, the cumulative abnormal return (CAR) and buy-and-hold abnormal return (BHAR) were applied for the measurement of the returns, and the three parametric test statistics: standardized-residual test, standardized cross-sectional test and conventional t-tests were also used. Finally, both of the simple and weighted average methods were employed to calculate the two set of firms' total gains, suggestion that Thai takeovers increase substantial and positive wealth gains. The study enriches the financial literature on emerging markets in terms of greatly enhancing variety results and provides a further comparison with developed stock markets.
Appears in Collections:School of Management Publications (SoM)

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