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Modelling Takeover Likelihood

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Author Info

  • Ronan G. Powell

    (Lecturer in Accounting, School of Management the Queen's University of Belfast, N. Ireland, UK)

Abstract

This paper employs a multinomial logit model in an attempt to better understand the motives behind takeovers. The results from the multinomial logit models show that the characteristics of hostile and friendly targets differ significantly and that these differences also vary depending on the time period under investigation. The results give some support to the disciplining role of the hostile takeover. Furthermore, conclusions based on a simple binomial logit model are likely to be misleading and result in incorrect inferences regarding the characteristics of firms subject to takeover. Copyright Blackwell Publishers Ltd 1997.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Business Finance & Accounting.

Volume (Year): 24 (1997-09)
Issue (Month): 7&8 ()
Pages: 1009-1030

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Handle: RePEc:bla:jbfnac:v:24:y:1997-09:i:7&8:p:1009-1030

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X

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Citations

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Cited by:
  1. Jens Köke, 2002. "Dynamics in ownership and firm survival: Evidence from corporate Germany," MEA discussion paper series 02013, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  2. Andy Cosh & Alan Hughes, 2008. "Takeovers after "Takeovers"," ESRC Centre for Business Research - Working Papers wp363, ESRC Centre for Business Research.
  3. Robin Nuttall, 1999. "An Empirical Analysis of the Effects of the Threat of Takeover on UK Company Performance," Economics Series Working Papers 1999-W05, University of Oxford, Department of Economics.
  4. Fotios Pasiouras & Chrysovalantis Gaganis & Constantin Zopounidis, 2008. "Regulations, Supervision Approaches and Acquisition Likelihood in the Asian Banking Industry," Asia-Pacific Financial Markets, Springer, vol. 15(2), pages 135-154, June.
  5. Köke, Jens, 2001. "Determinants of acquisition and failure: stylized facts and lessons for empirical studies," ZEW Discussion Papers 01-30, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. Nuria Alcalde Fradejas & Inés Pérez-Soba Aguilar, 2007. "Influencia de las ofertas públicas de adquisición sobre el empleo de las empresas adquiridas: un análisis empírico," Investigaciones Economicas, Fundación SEPI, vol. 31(1), pages 5-42, January.
  7. Charlie Weir & David Laing, 2003. "Ownership structure, board composition and the market for corporate control in the UK: an empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 35(16), pages 1747-1759.
  8. Pajuste, Anete, 2005. "Determinants and consequences of the unification of dual-class shares," Working Paper Series 0465, European Central Bank.
  9. Bhattacharjee, A. & Higson, C. & Holly, S. & Kattuman, P., 2004. "Business Failure in UK and US Quoted Firms: Impact of Macroeconomic Instability and the Role of Legal Institutions," Cambridge Working Papers in Economics 0420, Faculty of Economics, University of Cambridge.
  10. Braun, Thorsten V. & Krispin, Sebastian & Lehmann, Erik E., 2010. "Entrepreneurial human capital, complementary assets, and takeover probability," UO Working Papers 03-10, University of Augsburg, Chair of Management and Organization.
  11. Nuria Alcalde Fradejas & Manuel Espitia Escuer & Jaime Vallés Giménez, . "El mercado para el control de empresas en España. Identificación de las empresas objetivo de OPA," Studies on the Spanish Economy 159, FEDEA.
  12. Robin Nuttall, 1999. "Takeover Likelihood Models for UK Quoted Companies," Economics Series Working Papers 1999-W06, University of Oxford, Department of Economics.
  13. Panayotis Dessyllas & Alan Hughes, 2005. "The Revealed Preferences of High Technology Acquirers: An Analysis of the Characteristics of their Targets," Industrial Organization 0507009, EconWPA.
  14. Ali-Yrkkö, Jyrki & Hyytinen, Ari & Pajarinen, Mika, 2004. "Does Patenting Increase the Probability of Being Acquired? Evidence from Cross-border and Domestic Acquisitions," Discussion Papers 891, The Research Institute of the Finnish Economy.
  15. Florian Heiss & Jens Köke, 2004. "Dynamics in Ownership and Firm Survival: Evidence from Corporate Germany," European Financial Management, European Financial Management Association, vol. 10(1), pages 167-195.
  16. Athanasios Tsagkanos & Evangelos Koumanakos & Antonios Georgopoulos & Costas Siriopoulos, 2012. "Prediction of Greek takeover targets via bootstrapping on mixed logit model," Review of Accounting and Finance, Emerald Group Publishing, vol. 11(3), pages 315-334.
  17. Panayotis Dessyllas & Alan Hughes, 2005. "The revealed preferences of high technology acquirers: an analysis of the characteristics of their targets," ESRC Centre for Business Research - Working Papers wp306, ESRC Centre for Business Research.
  18. Foreman-Peck, James & Nicholls, Tom, 2008. "Peripherality and the Impact of SME Takeovers," Cardiff Economics Working Papers E2008/9, Cardiff University, Cardiff Business School, Economics Section, revised Jul 2012.
  19. Dionysios Polemis & Dimitrios Gounopoulos, 2012. "Prediction of distress and identification of potential M&As targets in UK," Managerial Finance, Emerald Group Publishing, vol. 38(11), pages 1085-1104, November.
  20. Ali-Yrkkö, Jyrki, 2006. "Technology Sourcing Through Acquisitions – Do High Quality Patents Attract Acquires?," Discussion Papers 1025, The Research Institute of the Finnish Economy.

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