IDEAS home Printed from https://ideas.repec.org/a/ids/injbaf/v1y2009i4p340-357.html
   My bibliography  Save this article

The returns to bidding firms in corporate takeovers: splitting up the pie

Author

Listed:
  • Han Donker
  • Saif Zahir

Abstract

In this paper, we examined the impact of ownership concentration in target firms on the returns to shareholders of bidding firms. In this research, we found that shareholders of bidding earn statistically significant positive abnormal returns surrounding takeover announcements. In addition, we found bidder returns of 4% over the event-window [−20, +20]. We showed that the degree of ownership concentration in target firms – measured by the Herfindahl-concentration index – significantly and positively affects the returns to bidding firms. These findings are consistent with the predictions of Grossman and Hart (1980), Bagnoli and Lipman (1988) and Holmstrom and Nalebuff (1992) takeover models.

Suggested Citation

  • Han Donker & Saif Zahir, 2009. "The returns to bidding firms in corporate takeovers: splitting up the pie," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 1(4), pages 340-357.
    • Handle: RePEc:ids:injbaf:v:1:y:2009:i:4:p:340-357
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=23149
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:injbaf:v:1:y:2009:i:4:p:340-357. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=277 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.