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Reverse takeovers: an alternative to the IPO?

Author

Listed:
  • Apostolos Dasilas
  • Athanasios Koulakiotis
  • Pantelis Vutirakis

Abstract

We examine the stock price behaviour of 23 Reverse Takeovers (RTs) that took place in the UK. A RT refers to a private company that acquires a publicly traded company in the stock exchange that is generally a cash shell. We examine the effects of the RTs on the wealth of public company's shareholders and we find that the stock price reaction of the public firm around the announcement date does not provide any evidence of systematic pattern. The only pattern observed is the disappearance of negative Abnormal Returns (ARs) for the target after the takeover.

Suggested Citation

  • Apostolos Dasilas & Athanasios Koulakiotis & Pantelis Vutirakis, 2009. "Reverse takeovers: an alternative to the IPO?," International Journal of Financial Services Management, Inderscience Enterprises Ltd, vol. 4(1), pages 11-20.
  • Handle: RePEc:ids:ijfsmg:v:4:y:2009:i:1:p:11-20
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