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Post-Takeover Effects on Thai Bidding Firms: Are Takeovers in the Bidder's Interests?

  • D. E. Allen

    ()

    (School of Accounting, Finance and Economics, Edith Cowan University, Joondalup Drive, Joondalup, Western Australia)

  • A. Soongswang

    ()

    (School of Management, Shinawatra University, Pathumthani Campus, 99 Moo 10 Bangtoey, Samkok, Pathumthani 12160, Thailand)

This paper analyses takeover effects on the Thai stock market in terms of their impact on the bidding firms' shareholders. We apply a comprehensive analysis of shareholder wealth effects using multiple methods. Our results conform with prior studies: see Jensen and Ruback (1983), Agrawal and Jaffe (1999), Bruner (2002) and Campa and Hernando (2004). Thai takeovers result in significant negative abnormal returns over the sixteen months after the takeover. The abnormal returns, variously defined, vary from -4% to -6%, and -0.20% (monthly) for the bidding firm's shareholders. Thai takeovers do not appear to add to bidding firms' shareholder wealth.

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Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal Review of Pacific Basin Financial Markets and Policies.

Volume (Year): 09 (2006)
Issue (Month): 04 ()
Pages: 509-531

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Handle: RePEc:wsi:rpbfmp:v:09:y:2006:i:04:p:509-531
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