An investigation into abnormal bid premium in UK corporate takeover market

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Amin, Nauman J. (2019). An investigation into abnormal bid premium in UK corporate takeover market. University of Birmingham. Ph.D.

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Abstract

This thesis investigates ‘abnormal bid premium’ according to Bates and Becher (2017) with firm’s governance characteristics in bid premium settlement, market reaction in the short term and long-term performance of the combined firm from both bidder and target sides to develop a comprehensive perspective on the variable of interest. Study is on sample of UK publicly listed firm merger announcements made from 1995 to 2012 with hand collected governance data. Short term market reaction is proxied by (CAR) cumulative abnormal return computed around merger announcements utilising standard event methodology and long-term market reaction is proxied utilising (BHAR) buy and hold abnormal returns. Whereas, abnormal operational performance is computed by utilising firm-matching technique in extant literature. Utilising abnormal bid premium proxy has evidenced that firm’s governance characteristics influences bid premium settlement. Furthermore, market reaction to abnormal bid premium provides an insight into the priorities of target and bidder shareholders during merger announcements. Finally, this thesis evidences that abnormal bid premium is a valid measure for abnormal bid premium quality for UK corporate takeover market.

Type of Work:

Thesis (Doctorates > Ph.D.)

Award Type:

Doctorates > Ph.D.

Supervisor(s):