Single Tender Offers: Impact on Target Firms
The IUP Journal of Financial Risk Management, Vol. X, No. 2, June 2013, pp. 50-61
Posted: 25 Oct 2013
Date Written: October 25, 2013
Abstract
This study primarily focuses on takeover effects on the target firms traded on the Stock Exchange of Thailand (SET) in the context of single tender offers. This research investigates a long-window excess return, or over a period of 12 months before and after the announcements by means of several metrics. The market and market-adjusted models are used to estimate the returns for the bid period, the Cumulative Abnormal Return (CAR) and Buy-and-Hold Abnormal Return (BHAR) methods are applied for the measurement of the returns of the target firms, and the three parametric test statistics are also used to test the significance of the abnornal returns of the target firm’s shareholders. The results suggest that takeovers occurring in the Thai stock market result in substantial positive wealth gains for the shareholders of the target firms.
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