H1B--TMT bonus will be positively associated with the size of the
target firm.
Competition is used to proxy for negotiating power of the
target firm. Two interaction terms, [COMPETITION.sub.T] * LT Dummy and ADVISING FEES [PAID.sub.T] * LT Dummy, are used to examine if competition in the
target firm's industry and advising fees paid by the LT target will increase the negotiating power of the LT firm.
This potentially occurs as buyer (acquiring firm) is willing to offer a higher price for taking over the seller (
target firm).
Mean equality tests were run between the takeover premiums under the four possible combinations of strong and weak management control for acquiring and
target firms.
HYPOTHEIS 2 (BAILOUT HYPOTHESIS): A change in the value of the
target firm after an M&A is greater in the case of a bailout than in the case of a non-bailout.
If board size is related to effectiveness, we expect that firms with smaller boards are more likely to make value-maximizing decisions: i.e., smaller boards will be more likely to seek or approve a takeover deal rather than resist it if they perceive that the deal will enhance firm value, especially when the
target firm performs poorly.
As previously indicated, Pruitt and Friedman (1986) provide evidence for boycott success in damaging the
target firm's wealth (boycott announcement caused the firms' stock prices to drop significantly).
The ODA captures the date when a takeover emerges as a possibility for the
target firm, but not necessarily by the eventual acquirer with whom the target ultimately chooses to merge.
The bankers who set up the deal and the
target firm's shareholders who sell out.
Risks: Professional liability claims are more likely if a
target firm does not value quality controls.
Moreover, the data show that after acquisition,
target firms save less cash out of incremental cash flows, and that the
target firm's investments tend to be less correlated with cash flows.
This research study investigates the abnormal returns (short-term m nature) to the shareholders of acquiring firms on the announcement of acquisitions of 100 per cent stake (complete acquisition) of the
target firm. The returns of the sample related to 398 complete acquisitions have also been analyzed for sub-samples disaggregated on the basis of the status of
target firm whether it is acquired as a wholly owned subsidiary (WOS) or to be absorbed with the operations of acquiring firm.
