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- Title
CORPORATE RAIDERS AND TAKEOVER TARGETS.
- Authors
Eddey, Peter H.
- Abstract
This study seeks to extend our understanding of the phenomenon of corporate raiding in two ways. First, by empirically examining propositions about corporate raiders that are regularly put forward in the media, a more informed debate about corporate raiders will be possible. Second, as raiders are not always successful in their bids, univariate and multivariate methods are used to identify the key bid characteristics most closely associated with success/fail outcomes. This study examined 61 bids made by seven Australian corporate raiders which occurred between August 1976 and December 1985. The first part of the study compared the financial characteristics of the 61 target companies subject to a bid from a corporate raider to the financial characteristics of 386 target companies subject to a bid from a non-raider acquirer. The purpose of this comparison was to test claims about corporate raiders that regularly appear in the financial media. It was found that raiders have typically bid for larger companies than have other acquirers. This lends credence to the claim that corporate raiders seek to establish corporate empires through a large-scale acquisitions policy. Furthermore, raiders tend to be much larger than their targets, evidencing the success of their takeover activity. Using univariate and multivariate analysis, no evidence was found to support claims that corporate raiders, more so than other acquirers, target lowly geared companies and/or highly liquid companies.
- Subjects
CORPORATE raiders; INVESTORS; MERGERS &; acquisitions; BIDDERS; BIDS; OFFER &; acceptance (Contracts)
- Publication
Journal of Business Finance & Accounting, 1991, Vol 18, Issue 2, p151
- ISSN
0306-686X
- Publication type
Article
- DOI
10.1111/j.1468-5957.1991.tb00586.x