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Post-Takeovers Effects on Thai Bidding Firms: Are Takeovers in the Bidder's Interests?

By David E Allen and Amporn Soongswang

Abstract

This paper analyses takeover effects on the Thai stock market in terms of the impact on bidding firms shareholders. Various shareholder wealth effects are reported including those from a matched reference portfolio control method with bootstrapped skewness-adjusted t-statistics. The findings are consistent with past studies: see the survey studies by Jensen and Ruback (1983), Agrawal and Jaffe (1999), Bruner (2002) and Campa and Hernando (2004). Thai takeovers result in significant negative abnormal returns over the following period (+1, +16) months, varying from -4% to -6%, and -0.20% (monthly) for bidding firms shareholders. They do not appear to add to their wealth.Thai takeovers, bidding firms, control portfolios, bootstrapped t-tests

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