Akhigbe, Aigbe, Jory, Surendranath R. and Madura, Jeff (2009) Takeovers of newly public targets. Applied Financial Economics, 19 (19). pp. 1523-1530. ISSN 0960-3107Full text not available from this repository.
While studies have documented that Initial Public Offering (IPO) aftermarket performance is weak, little is known about how the aftermarket performance is affected by takeovers of the newly public firms. We find that the aftermarket performance of IPOs is more favourable for those newly public firms that are acquired. Thus, the IPO aftermarket performance is weaker when removing targets and focusing on firms with continuing operations. We also find the primary reason for the difference in performance between the newly public firms that are acquired versus those that are not is the takeover premium. IPO firms with a lower market-book multiple, lower financial leverage and higher operating leverage can command higher premiums.
|Subjects:||University of Westminster > Westminster Business School|
|Depositing User:||Miss Nina Watts|
|Date Deposited:||02 Feb 2010 16:56|
|Last Modified:||28 Jun 2010 09:07|
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