Does abnormal bid premium matter to the market? evidence from UK
Abstract/Description
This study investigates ‘abnormal bid premium’ according to Bates and Becher (2017) with firm’s governance characteristics in bid premium settlement, market reaction in the short term of the combined firm from both bidder and target sides to develop a comprehensive perspective on the variable of interest. Study is on sample of UK publicly listed firm merger announcements made from 1995 to 2012 with hand collected governance data. Short term market reaction is proxied by (CAR) cumulative abnormal return computed around merger announcements utilizing standard event methodology. Utilizing abnormal bid premium proxy has evidenced that firm’s governance characteristics influences bid premium settlement. Furthermore, market reaction to abnormal bid premium provides an insight into the priorities of target and bidder shareholders during merger announcements. Finally, this study evidence that abnormal bid premium is a valid measure for abnormal bid premium quality for UK corporate takeover market.
Keywords
M&A, Abnormal Bid Premium, Corporate Governance, Entrenchment
Track
Accounting, Law, and Finance
Session Number/Theme
Session 3A
Session Chair
Dr. Riffat Mughal, Shaheed Zulfikar Ali Bhutto Institute of Science & Technology (SZABIST)
Session Discussant
Dr. Hilal Anwar Butt; Dr. Mohsin Sadaqat
Start Date/Time
24-6-2022 2:20 PM
End Date/Time
24-6-2022 2:40 PM
Location
Crystal Ball Room, Marriott Hotel, Karachi
Recommended Citation
Amin, N. (2022). Does abnormal bid premium matter to the market? evidence from UK. 3rd IBA SBS International Conference 2024. Retrieved from https://ir.iba.edu.pk/sbsic/2022/program/37
COinS
Does abnormal bid premium matter to the market? evidence from UK
Crystal Ball Room, Marriott Hotel, Karachi
This study investigates ‘abnormal bid premium’ according to Bates and Becher (2017) with firm’s governance characteristics in bid premium settlement, market reaction in the short term of the combined firm from both bidder and target sides to develop a comprehensive perspective on the variable of interest. Study is on sample of UK publicly listed firm merger announcements made from 1995 to 2012 with hand collected governance data. Short term market reaction is proxied by (CAR) cumulative abnormal return computed around merger announcements utilizing standard event methodology. Utilizing abnormal bid premium proxy has evidenced that firm’s governance characteristics influences bid premium settlement. Furthermore, market reaction to abnormal bid premium provides an insight into the priorities of target and bidder shareholders during merger announcements. Finally, this study evidence that abnormal bid premium is a valid measure for abnormal bid premium quality for UK corporate takeover market.
