Corporate Takeover Targets E-Book

Hicham Meghouar

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 380

Veröffentlichungsjahr: 2016

Beschreibung

The term "takeover", of which the first form is mergers and acquisitions (M&A), refers to the transfer of control of a business from one group of shareholders to another. Considering the importance of this issue and the real drives behind takeovers, it has become imperative to identifying companies that are vulnerable to takeover by two types: tender offer and exchange offer. This book thus presents the legal aspects, the theoretical justifications and the empirical contributions of takeovers, and analyzes the economic and financial characteristics of targets in order to assess the probability of being acquired. An empirical approach based on two quantitative studies is then applied to the European market, which is still virgin territory in terms of academic research. Finally, acquisition probability models have been developed and they have a 72% forecast accuracy average rate of targets. Corporate Takeover Targets is aimed at students and researchers in economic and management, as well as M&A consultants.

Leseprobe

Table of Contents

Cover

Dedication

Title

Copyright

Introduction

Part 1: Corporate Takeovers: Theoretical Justifications and Empirical Contributions

Introduction to Part 1

1 Economic and Legal Framework of Takeover Bids in Europe

1.1. Corporate takeover: general description

1.2. The economic impact of takeover bids

1.3. Regulation and control of takeover bids in Europe

1.4. Conclusion

2 Motivations and Economic Role of Takeover Bids: a Theoretical and Empirical Characterization

2.1. Economic interpretation of takeover bids and plurality of their theoretical references

2.2. Performance and effectiveness of takeover bids: results of empirical research

2.3. Motivations of takeover bids: results of empirical research

Part 2: Exploration of Predictive Variables for Takeover Bids and Forecast of European Targets

Introduction to Part 2

3 Detection of Predictive Variables for Corporate Takeover: an Exploratory Study

3.1. Conceptual and empirical framework: theoretical positioning, survey characteristics and choice of data analysis method

3.2. Results of empirical tests: exploratory factor analysis in principal components

4 Developing a Takeover Prediction Model: The European Case

4.1. Empirical analysis: hypotheses, sample selection and statistical methodology

4.2. Modeling takeover bids in Europe: predicting takeover targets

Conclusion

Bibliography

Index

End User License Agreement

List of Illustrations

1 Economic and Legal Framework of Takeover Bids in Europe

Figure 1.1. M&A activities and waves during the period 1895-1989 [BAR 01]

Figure 1.2. Progress in cross-border M&A 1990-2000

Figure 1.3. Inbound M&A by region

Figure 1.4. Outbound M&A by region

Figure 1.5. Number of M&A transactions involving US and EU companies

Figure 1.6. Total amount of M&A transactions involving US and EU companies

Figure 1.7. Total amount of M&A transactions in GDP percentage

Figure 1.8. Progress of M&A transactions in the world, the United States and Europe

Figure 1.9. Changes in interest rates in the United States and France

Figure 1.10. Developments in long term stock market indexes in the United States and Europe

Figure 1.11. Changes in stock indexes in Europe over one year

Figure 1.12. Evolution of the PER in the United States and Europe

List of Tables

1 Economic and Legal Framework of Takeover Bids in Europe

Table 1.1. The distribution of inbound M&A by region and by country (billions of USD)

Table 1.2. The distribution of outbound M&A by region and by country (billions of USD)

2 Motivations and Economic Role of Takeover Bids: a Theoretical and Empirical Characterization

Table 2.1. Short term performance of target and acquiring companies

Table 2.2. Long-term performance of target and acquiring companies

Table 2.2. Empirical studies on the profiles of targets for takeover bids

Table 2.3. Empirical studies relating to the profile of acquiring companies

Table 2.4. Empirical studies relating to the profiles acquirers and targets of takeover bids

3 Detection of Predictive Variables for Corporate Takeover: an Exploratory Study

Table 3.1. Scores obtained for the predictor variables

Table 3.2. KMO index and Bartlett test

Table 3.3. Quality of representation

Table 3.4. Total explained variance

Table 3.5. Matrix of components

Table 3.6. Covariance matrix of components

4 Developing a Takeover Prediction Model: The European Case

Table 4.1. Takeover theories, variables used and expected sign

Table 4.2. Sectoral distribution for the period P1 (1996–2000)

Table 4.3. Sectoral distribution for the period P2 (2001–2007)

Table 4.4. Sectoral distribution for the total period PT (1996–2007)

Table 4.5. Origin of targets and acquirers over the total period

Table 4.6. Results of static univariate analysis over the total period (1996–2007)

Table 4.7. Results of the static univariate analysis of sub-period P1 (1996–2000)

Table 4.8. Results of univariate analysis of the static sub-period P2 (2001–2007)

Table 4.9. Results of dynamic univariate analysis over the total period (1996–2007)

Table 4.10. Results of univariate dynamic analysis in P1 (1996–2000)

Table 4.11. Results of dynamic univariate analysis in P2 (2001–2007)

Table 4.12. Results of the static multivariate analysis for the total period (1996–2007)

Table 4.13. Results of the static multivariate analysis for sub-period P1 (1996–2000)

Table 4.14. Results of the static multivariate analysis for sub-period P2 (2001–2007)

Table 4.15. Results of dynamic multivariate analysis for total period (1996–2007)

Table 4.16. Results of the dynamic multivariate analysis for sub-period P1 (1996–2000)

Table 4.17. Results of the dynamic multivariate analysis for sub-period P2 (2001–2007)

Table 4.18. Sectoral composition of the sample E(P3) of European companies acquired in 2008

Table 4.19. Results of internal and external validity of static prediction models

Table 4.20. Results of internal and external validity of dynamic prediction models

Guide

Cover

Table of Contents

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In memory of my parents…

Series Editor

Jacques Janssen

Corporate Takeover Targets

Acquisition Probability

Hicham Meghouar

First published 2016 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address:

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John Wiley & Sons, Inc.

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USA

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© ISTE Ltd 2016

The rights of Hicham Meghouar to be identified as the author of this work have been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.

Library of Congress Control Number: 2016933879

British Library Cataloguing-in-Publication Data

A CIP record for this book is available from the British Library

ISBN 978-1-84821-917-5

Introduction

In 2008, the bankruptcy of Lehman Brothers investment bank created a significant abyss. The United States feared a repetition of the 1929 crisis. A year later, in Asia, the United States and Europe, analysts spoke of the end of the recession. In the financial market, the crisis seemed a thing of the past. The continuous rise in stock indexes in London, Paris, New York and Tokyo since March 2009 demonstrated this trend. In early September CAC 40 gained 3.78%, crossing the symbolic threshold of 3.700 points with 3,734.89 points precisely. In Wall Street, S&P 500 exceeded the 10,000 point mark after gaining 3.94%, while in London, the FTSE made 3.29%. According to the stock exchange rule, positive momentum can result in a “speculative excess”. In the absence of significant economic indicators, investors contented themselves with announcements of takeover bids. After months of inactivity, several listed companies engaged in corporate takeovers.

The year 2009 recorded massive transactions such as Kraft’s bid for Cadbury1, followed by that of Vivendi for the Brazilian operator GVT, the acquisition of Cegelec by Vinci group or the announcement of negotiations between Japanese brewer Suntory and Orangina. The slow pace in takeover bids witnessed in 2009 was as a result of the economic environment, which was too uncertain for most company executives to embark on large-scale transactions. During the first quarter of 2010, several transactions were announced. Indeed, according to Le Monde, on Friday February 5 the US industrial gas producer launched a hostile takeover bid of 7 billion dollars (5.1 billion Euros) on its competitor and compatriot . The bid of 60 dollars per share represented a premium of 38% compared to the previous stock price. Analysts, however, questioned the possible intervention of German or French , globally number one and two respectively. On Monday March 1, British insurer announced its will to acquire for 35.5 billion dollars (26.3 billion euros) the Asian assets of US insurer . It would constitute the largest acquisition project in insurance history. This marked the return of major deals.