Close window

ABNORMAL RETURNS AND COMBINED VALUES

Amporn Soongswang

Shinawatra University, Thailand

 

ABSTRACT

This study features the impact of takeovers on both target and bidding firms traded on the Stock Exchange of Thailand (SET). The study investigates a long-window abnormal return, or during a period of twelve months before and after the announcements using several metrics. Their long-term bid period returns were measured by cumulative, buy-and-hold average abnormal returns estimated from the market and market-adjusted models. The three parametric statistic tests: standardized-residual test, standardized cross-sectional test and conventional t-tests were used for significance tests of the means. The results add to the literature on emerging markets and provide a further comparison with developed stock markets. They are consistent when compared within this study, and most past studies using the limited range of research methods, suggesting that a Thai takeover results in significant and positive combined values for the target and bidding firms‟ shareholders.

Key words: takeover, abnormal return, combined values, Thailand

JEL Codes: G14, G34