Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242256 
Authors: 
Year of Publication: 
2018
Citation: 
[Journal:] European Financial and Accounting Journal [ISSN:] 1805-4846 [Volume:] 13 [Issue:] 2 [Publisher:] University of Economics, Faculty of Finance and Accounting [Place:] Prague [Year:] 2018 [Pages:] 59-84
Publisher: 
University of Economics, Faculty of Finance and Accounting, Prague
Abstract: 
This paper attempts to portray the empirical difference in investors' perception towards the cross-border and domestic merger and acquisition (M&A) announcements of UK acquirer firms reflected through the significant abnormal stock return. The researcher conducts a short-run event study on the daily stock return of 100 UK bidding firms (50 involved in domestic and 50 involved in cross-border M&As between 2015 and 2016) to compare any significant abnormal returns (AAR and CAAR) around the event announcement period. National and international mergers and acquisitions have witnessed a considerable expansion globally, with the United Kingdom being one of the pioneers in the worldwide market for corporate domination. Research results exhibit that in domestic M&A bidding, firms experience a significant positive announcement return (CAAR) in the event window (t1 - t0) redolent to the positive expectation of investors from the M&A transaction. However, the post-announcement negative return concurrently proves the initial overreaction of investors and the semi-efficient market hypothesis. Foreign M&As result in an insignificant positive return (CAAR) in all the three event windows. There was existence of a positive trend in the cross-border pre-event return (AAR) indicative of narrow possibilities of insider trading or investors' optimistic anticipation, but this is not significantly conclusive.
Subjects: 
Abnormal return
Cross-border
Domestic
Mergers and acquisitions
Shareholders
Persistent Identifier of the first edition: 
Document Type: 
Article

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