Takeover activity, CEO turnover, and the market for corporate control

Article Abstract:

Results of an examination of the theory that takeovers act as a disciplinary mechanism on non-wealth maximizing management affirm the hypothesis that the market for corporate control acts in a manner predicted by theories of market discipline. Specifically, the results revealed a substantial increase in the rate of target company CEO turnover after the takeover and poor pre-bid share price performance by target companies generally and specifically for those from which the CEO was subsequently ousted. It was also noted that there was no substantial difference in target share price performance when bids were categorized as hostile or friendly and that acquiring firms put in superior performance up to five years before the bid.

Research, Human resource management, Chief executive officers, Employee turnover

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Shareholder wealth gains in mergers: effect of synergy and ownership structure

Article Abstract:

Synergy from operational, financial and managerial sources create value for both bidder and target shareholders. A merger between companies with a complementary fit in terms of resources and surplus investment opportunities increases shareholder wealth of bidder and target. Furthermore, shareholders of a highly rated acquiring company lose wealth when their firm acquires a less highly rated firm. However, target shareholders gain wealth under the same arrangement.

Acquisitions & Mergers Analysis, Finance, Stockholders, Financial analysis

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Corporate Acquisitions and the Operating Performance of Malaysian Companies

Article Abstract:

Findings indicate that reported improvements in Malaysian companies making acquisitions that were studied between 1988 and 1992 were not achieved by concentrating on short-term goals to the detriment of long-term viability. A caveat against generalizing from these findings is included.

Malaysia, Comparative analysis, Strategic planning (Business), Corporate growth, Industry growth

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