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Takeovers and the Market for Corporate Control in Japanese REITs




Japanese real estate investment trusts (J-REITs) were established in 2001. They have rapidly grown in number and size and there have been many J-REIT mergers following the Global Financial Crisis (GFC). J-REITs typically have a common ownership that renders most takeovers friendly, therefore the motivation for mergers is likely related to financial hardship. We examine the market response and the post- merger performance of these J-REIT mergers. We find significant abnormal trading volume for both surviving and absorbed J-REITs in the immediate days before the merger. Absorbed J-REITs suffer a significantly negative return in the two days before the merger announcement and there is no observed improvement in the post-merger operating performance. Unlike other mergers in Japan, the merger premium for J-REITs is inversely predictive of post-merger performance.

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  • Guojie Ma & David Michayluk, 2015. "Takeovers and the Market for Corporate Control in Japanese REITs," Published Paper Series 2015-2, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
  • Handle: RePEc:uts:ppaper:2015-2

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    Cited by:

    1. Robbie Lin & Chyi Lin Lee & Graeme Newell, 2019. "The significance of Residential REITs in Japan as an Institutionalized property sector," ERES eres2019_122, European Real Estate Society (ERES).

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