Impact of Japanese Mergers on Shareholder Wealth: An Analysis of Bidder and Target Companies

The market for corporate control in the second largest economy in the world behaves very different from that in the U.S. Using a sample of 91 mergers in the period 1982-2003 we document several distinctive features of this market in Japan. First, we show that in stark contrast to the pro-cyclical U.S. merger waves, mergers in Japan tend to be counter-cyclical, both with respect to the general economy as well as with respect to stock market valuations. Second, and again in contrast to the U.S. experience, we find that a significant fraction of Japanese mergers are orchestrated by the main banks; in such cases, mergers are not between two weak companies, but at least one of the merging companies is financially strong. Other distinctive features of Japanese mergers are the positive pre-announcement returns accruing to both bidders and targets, with bidders capturing approximately half the gains that accrue to target firms. We also find differential shareholder wealth effects in the bubble period (1982-1989), the early 1990s, and the post-financial regulation regime (1997-2003). Overall our results point to a market for corporate control that is distinctly less shareholder-centered than that in the U.S. and one where creditors play an important, perhaps dominant, role.mergers;Japanse mergers;corporate control;take-over

Relative Distress and Return Distribution Characteristics of Japanese Stocks, a Fuzzy-Probabilistic Approach

In this article, we demonstrate that a direct relation exists between the context of Japanese firms indicating relative distress and conditional return distribution properties. We map cross-sectional vectors with company characteristics on vectors with return feature vectors, using a fuzzy identification technique called Competitive Exception Learning Algorithm (CELA)1. In this study we use company characteristics that follow from capital structure theory and we relate the recognized conditional return properties to this theory. Using the rules identified by this mapping procedure this approachenables us to make conditional predictions regarding the probability of a stock's or a group of stocks' return series for different return distribution classes (actually return indices). Using these findings, one may construct conditional indices that may serve as benchmarks. These would be particularly useful for tracking and portfolio management.capital structure;asset pricing;fuzzy systems;conditional return distribution;heuristic learning

Doubling: Nick Leeson's trading strategy

This paper examines the trading strategy attributed to Mr. Nicholas Leeson, who was the chief derivatives trader of Barings bank in Singapore. His activities were the main cause of the eventual collapse of Barings bank. Daily information is available for the full period Leeson was active in Singapore, from January 1992 until 1995, for all relevant products. The information includes daily volume, open interest, opening, closing, highest and lowest price. The empirical evidence suggests that Leeson followed a doubling strategy: he continuously doubled his position as prices were falling

Identifying and prioritizing demersal fisheries restricted areas based on combined ecological and fisheries criteria: The western Mediterranean

The western Mediterranean basin is a high marine biodiversity area under severe pressure by changing climate and intense human activities. Beyond national jurisdictions, international institutions such as the General Fisheries Commission for the Mediterranean (GFCM) work towards canalizing a regional consensus that fishing practices should evolve to better support the 2030 Agenda for Sustainable Development. In this context, Fisheries Restricted Areas (FRA) are proposed as effective management measures to contribute towards increasing fisheries sustainability in the region that can be considered, under some conditions, as Nature-based Solutions (NbS); however, how to operationalize their framework remains unclear. In this study, based on combined ecological and fisheries criteria, we identify and prioritize six potential priority areas for management (PAMs) in the western Mediterranean Sea. They are specifically aimed at the protection and recovery of Essential Fish Habitats and the conservation of Vulnerable Marine Ecosystems, whilst requiring limited adaptation of fisheries practices due to their relative low fishing pressure. We compare the identified areas to those that are currently under protection, and to areas that have been proposed for protection at the GFCM. Our results show that the FRAs and other spatial management measures introduced in the last years marginally contribute to the protection PAMs in the western Mediterranean region. However, the adoption of FRAs that are currently under discussion at the GFCM could contribute significantly to improve the situation. FRAs could also contribute to operationalize NbS in the western Mediterranean Sea when properly designed and implemented

Impact of Japanese Mergers on Shareholder Wealth: An Analysis of Bidder and Target Companies

The market for corporate control in the second largest economy in the world behaves very different from that in the U.S. Using a sample of 91 mergers in the period 1982-2003 we document several distinctive features of this market in Japan. First, we show that in stark contrast to the pro-cyclical U.S. merger waves, mergers in Japan tend to be counter-cyclical, both with respect to the general economy as well as with respect to stock market valuations. Second, and again in contrast to the U.S. experience, we find that a significant fraction of Japanese mergers are orchestrated by the main banks; in such cases, mergers are not between two weak companies, but at least one of the merging companies is financially strong. Other distinctive features of Japanese mergers are the positive pre-announcement returns accruing to both bidders and targets, with bidders capturing approximately half the gains that accrue to target firms. We also find differential shareholder wealth effects in the bubble period (1982-1989), the early 1990s, and the post-financial regulation regime (1997-2003). Overall our results point to a market for corporate control that is distinctly less shareholder-centered than that in the U.S. and one where creditors play an important, perhaps dominant, role

Dwarfism with joint laxity in Friesian horses is associated with a splice site mutation in B4GALT7

Background: Inbreeding and population bottlenecks in the ancestry of Friesian horses has led to health issues such as dwarfism. The limbs of dwarfs are short and the ribs are protruding inwards at the costochondral junction, while the head and back appear normal. A striking feature of the condition is the flexor tendon laxity that leads to hyperextension of the fetlock joints. The growth plates of dwarfs display disorganized and thickened chondrocyte columns. The aim of this study was to identify the gene defect that causes the recessively inherited trait in Friesian horses to understand the disease process at the molecular level. Results: We have localized the genetic cause of the dwarfism phenotype by a genome wide approach to a 3 Mb region on the p-arm of equine chromosome 14. The DNA of two dwarfs and one control Friesian horse was sequenced completely and we identified the missense mutation ECA14:g.4535550C> T that cosegregated with the phenotype in all Friesians analyzed. The mutation leads to the amino acid substitution p.(Arg17Lys) of xylosylprotein beta 1,4-galactosyltransferase 7 encoded by B4GALT7. The protein is one of the enzymes that synthesize the tetrasaccharide linker between protein and glycosaminoglycan moieties of proteoglycans of the extracellular matrix. The mutation not only affects a conserved arginine codon but also the last nucleotide of the first exon of the gene and we show that it impedes splicing of the primary transcript in cultured fibroblasts from a heterozygous horse. As a result, the level of B4GALT7 mRNA in fibroblasts from a dwarf is only 2 % compared to normal levels. Mutations in B4GALT7 in humans are associated with Ehlers-Danlos syndrome progeroid type 1 and Larsen of Reunion Island syndrome. Growth retardation and ligamentous laxity are common manifestations of these syndromes. Conclusions: We suggest that the identified mutation of equine B4GALT7 leads to the typical dwarfism phenotype in Friesian horses due to deficient splicing of transcripts of the gene. The mutated gene implicates the extracellular matrix in the regular organization of chrondrocyte columns of the growth plate. Conservation of individual amino acids may not be necessary at the protein level but instead may reflect underlying conservation of nucleotide sequence that are required for efficient splicing

Doubling: Nick Leeson's trading strategy

This paper examines the trading strategy attributed to Mr. Nicholas Leeson, who was the chief derivatives trader of Barings bank in Singapore. His activities were the main cause of the eventual collapse of Barings bank. Daily information is available for the full period Leeson was active in Singapore, from January 1992 until 1995, for all relevant products. The information includes daily volume, open interest, opening, closing, highest and lowest price. The empirical evidence suggests that Leeson followed a doubling strategy: he continuously doubled his position as prices were falling

Using ecosystem models to inform ecosystem-based fisheries management in Europe: a review of the policy landscape and related stakeholder needs

The need to implement an ecosystem-based fisheries management (EBFM) is enshrined in numerous regulations and strategies, at both global and European level. In practice, it is challenging to implement EBFM because it requires a complex evaluation of interlinked management effects and environmental and climate forcing on multi-species interactions, habitat status and human activities. Ecosystem models are one of the most critical research tools to inform EBFM, because they can integrate a wide variety of data, examine multiple and complex ecosystem interactions, and can make forecasts based on specific management scenarios. However, despite clear progress in marine ecosystem modelling, many models do not address policy goals and targets, which hinders uptake in policy. In this paper, we review the global and European policies and implementing bodies which directly or indirectly have a repercussion on the implementation of EBFM. Moreover, we highlight specific stakeholder needs related to the implementation of EBFM in European waters, which ecosystem models could help address. We review the policy commitments that drive these needs and the concerns raised by stakeholders during a survey and dedicated workshop. Key topics of concern were effects of climate change; bycatch; protected areas/fisheries restricted areas; and reducing the impacts of trawling. Stakeholders also provided specific questions related to these topics which ecosystem models could help address. Scenario and data results visualizations, as well as specific barriers in using the results of ecosystem models for decision-making are also discussed. A close involvement of stakeholders in scenario development and in designing graphical outputs is important, and can help overcome some of the main barriers that can hinder uptake of models and scenarios, including a lack of understanding of the benefits and limits of ecosystem models; insufficient involvement and interaction with stakeholders; and inadequate characterization of uncertainties.publishedVersio