"The value effects of takeover announcements for targets listed on the NYSE and Euronext Paris "
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The topic of value effects of takeover announcements has been studied extensively in the field of corporate finance. However, fewer studies have established whether the effects of these takeover announcements differ between exchange markets. Also the period prior to the announcement has often been neglected in existing studies. Therefore this study examines both period prior to and surrounding the announcement date, and compares the results between targets listed on the New York Stock Exchange and Euronext Paris. By examining the abovementioned, the study answers the following question: What are the value effects prior to and surrounding M&A announcements for takeover targets listed on the NYSE and the Euronext Paris? The study finds that the stocks of targets listed on the NYSE and Euronext Paris both run up in the period prior to the announcement date, but rise sharply upon the announcement date. This run-up and sharp increase upon announcement in terms of the CAAR is lower for Euronext Paris targets for both event windows. The study established that institutional differences play an important role in the height of the CARs surrounding the announcement date. How these institutional differences lead to higher/lower CARs is a possible direction for future research.
Faculteit der Managementwetenschappen