The impact of the announcement of acquisition of divested assets on buyers' wealth - Asset fit and disclosure of funds used: Evidence from the UK

Balachandran, Balasingham, Faff, Robert, Love, Roger and Menon, Andrew (2008) The impact of the announcement of acquisition of divested assets on buyers' wealth - Asset fit and disclosure of funds used: Evidence from the UK. Multinational Finance Journal, 12 3/4: 219-240.

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Author Balachandran, Balasingham
Faff, Robert
Love, Roger
Menon, Andrew
Title The impact of the announcement of acquisition of divested assets on buyers' wealth - Asset fit and disclosure of funds used: Evidence from the UK
Journal name Multinational Finance Journal
ISSN 1096-1879
Publication date 2008-01-01
Sub-type Article (original research)
Volume 12
Issue 3/4
Start page 219
End page 240
Total pages 22
Place of publication Camden, NJ, United States
Publisher Multinational Finance Society
Language eng
Formatted abstract
This study examines the effects of announcements of acquisition of assets
on shareholder wealth of buyers over the period January 2000 to December
2002 in the U.K. Significant positive announcement period abnormal returns for
‘fit’ acquisitions of divested assets that disclosed the “sources of funds” are
documented. Multivariate regression analysis shows that announcement period
abnormal returns are significantly related to pre-announcement period abnormal
returns, relative size of the acquisitions and disclosure of sources of funds.
Overall, there is little or no support for the asset fit hypothesis. However, there
is strong support for “Fund Source Disclosure”, “Fund Source Pecking-Order”
and “Relative Size of Acquisition” Hypotheses (JEL: G34).
Keyword Divested asset acquisition
Buyers
Price reaction
Fit and non-fit
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collection: UQ Business School Publications
 
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Created: Fri, 04 Mar 2011, 19:35:51 EST by Karen Morgan on behalf of UQ Business School