Seminar by Winthrop Professor Raymond da Silva Rosa
- Topic: Are stock M&A offerers smart market timers? Contrary Australian evidence
- Speaker: Winthrop Professor Raymond da Silva Rosa, Accounting and Finance, UWA Business School, University of Western Australia
- Venue:Seminar Room, Level 6, Room 623, E4A
- When: 16th August, 2013, (Fri)
- Time: 11.30am - 12.30pm (Morning Tea from 11am)
We investigate if ASX-listed acquirers that offer their stock as consideration are able to benefit their long-term shareholders by opportunistically making bids when their equity is over-valued. Contrary to US-based research, we find no evidence that stock-based offerers that fail to acquire their targets subsequently underperform stock-based bidders that acquired control of their target. Our results are consistent with the takeover provisions in Australia's Corporations Law substantially reducing the possibility of opportunistic behaviour by over-valued prospective acquirers. We contend our results and those reported for the US may be accommodated in a neo-classical framework that assumes information is costly to acquire and that allows for agency costs.