Takeover motives in a weak regulatory environment surrounding a market shock: a case study of New Zealand with a comparison of Gondhalekar and Bhagwat’s (2003) US findings

Takeover motives in a weak regulatory environment surrounding a market shock: a case study of New... We examine the motives for takeovers in New Zealand surrounding the 1987 stock market crash and compare with the US findings of Gondhalekar and Bhagwat (2003). There are a number of structural differences between the New Zealand and US markets that could impact on merger motives. Compared with the US, New Zealand is a small capital market; with weak takeover regulation and a prolonged aftermath of the 1987 stock market crash. Consistent with US research, we find evidence of synergy and hubris motivations in New Zealand takeovers although we find the synergy motivation is stronger. Contrary to expectations we find no evidence of agency motivated takeovers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

Takeover motives in a weak regulatory environment surrounding a market shock: a case study of New Zealand with a comparison of Gondhalekar and Bhagwat’s (2003) US findings

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Publisher
Springer Journals
Copyright
Copyright © 2007 by Springer Science+Business Media, LLC
Subject
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
ISSN
0924-865X
eISSN
1573-7179
D.O.I.
10.1007/s11156-007-0021-3
Publisher site
See Article on Publisher Site

Abstract

We examine the motives for takeovers in New Zealand surrounding the 1987 stock market crash and compare with the US findings of Gondhalekar and Bhagwat (2003). There are a number of structural differences between the New Zealand and US markets that could impact on merger motives. Compared with the US, New Zealand is a small capital market; with weak takeover regulation and a prolonged aftermath of the 1987 stock market crash. Consistent with US research, we find evidence of synergy and hubris motivations in New Zealand takeovers although we find the synergy motivation is stronger. Contrary to expectations we find no evidence of agency motivated takeovers.

Journal

Review of Quantitative Finance and AccountingSpringer Journals

Published: Apr 27, 2007

References

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