IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v36y1987i2p147-56.html
   My bibliography  Save this article

Life after Takeover

Author

Listed:
  • Ravenscraft, David J
  • Scherer, F M

Abstract

Economic consequences of takeovers are investigated by analyzing profitability of enterprises acquired a s a direct or indirect ("white knight") consequence of tender offer s. Target companies' pre-tender profitability averaged 0.97 percentag e points below peer industry norms. Nine years after takeover, acquir ed lines of business had operating income/assets percentages 3.10 poi nts below those of non-tender lines with similar industry bases, mark et shares, and merger accounting methods. Most of the targets' postta keover profit decline stemmed from asset value writeups. There is no indication that on average the acquirers raised their targets' operat ing profitability, net of merger-related accounting adjustments. Copyright 1987 by Blackwell Publishing Ltd.

Suggested Citation

  • Ravenscraft, David J & Scherer, F M, 1987. "Life after Takeover," Journal of Industrial Economics, Wiley Blackwell, vol. 36(2), pages 147-156, December.
  • Handle: RePEc:bla:jindec:v:36:y:1987:i:2:p:147-56
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0022-1821%28198712%2936%3A2%3C147%3ALAT%3E2.0.CO%3B2-K&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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

    More about this item

    Statistics

    Access and download statistics

    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:bla:jindec:v:36:y:1987:i:2:p:147-56. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.