Predicting European Takeover Targets
Abstract"This article extends the Palepu (1986) acquisition likelihood model by incorporating measures of a technical nature, e.g. momentum, trading volume as well as a measure of market sentiment. We use the proposed model to predict takeover targets in a large sample of European and cross-border merger and acquisition deals and validate its performance on an in- and out-of-sample basis. The robustness of the proposed model is investigated across several dimensions. In addition we explore the ability of the model to form the basis of successful takeover timing investment strategies. The results of our empirical analysis suggest that the proposed model predicts European takeover targets with relatively high accuracy and is able to determine portfolios that earn significant returns which are not explained by conventional risk factors." Copyright (c) 2008 The Authors Journal compilation (c) 2008 Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by European Financial Management Association in its journal European Financial Management.
Volume (Year): 15 (2009)
Issue (Month): 2 ()
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1354-7798
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- Pei Ling Lee & Roy Wye Leong Khong & Suganthi Ramasamy, 2010. "Characteristics of Firms Going Private in the Malaysian Stock Exchange," Economics Bulletin, AccessEcon, vol. 30(2), pages 1307-1319.
- Koch, Adam S. & Lefanowicz, Craig E. & Robinson, John R., 2012. "The effect of quarterly earnings guidance on share values in corporate acquisitions," Journal of Corporate Finance, Elsevier, vol. 18(5), pages 1269-1285.
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