The Characteristics and Fate of Firms that Publicly Seek to be Acquired

10.6291/AIAPM.2014.06.04

Derek K. Oler；Kevin R. Smith

Financial Distress ； Acquisitions ； Announcement Returns ； Post-Event Returns ； Private Information

Advances in Investment Analysis and Portfolio Management

6期（2014 / 04 / 01）

83 - 110

英文

In this paper, we investigate 429 firms that publicly advertise a desire to be acquired (”take-me-over” or TMO firms) from 1990 to 2007. In general TMO firms show evidence of high debt levels as well as fundamental underperformance relative to industry peers, and the TMO announcement significantly increases the odds of receiving a subsequent takeover offer. Although TMO firms enjoy positive abnormal returns over the five days surrounding their announcement, their abnormal returns over the year following their announcement are significantly negative, which suggests that the TMO announcement signals bad news that is not fully anticipated by the market.

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