: The Influence of Blockholder Heterogeneity on Acquirer Performance - A comparison between the US and Europe
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2021-02-04
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en
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The puzzle surrounding zero or negative M&A announcement returns of acquirer firms persists till date. The common assumption of many studies is that negative gains are caused through the misalignment of interest between the management and shareholders of the bidder firm. This study links ownership concentration in acquirer firms to acquirer firm performance. This relationship is investigated based on the assumption that a higher ownership concentration may cause positive gains for acquirer firms in that governance related issues may be mitigated. This study makes a distinction between shareholder identity and makes comparisons under the consideration of different institutional settings, a comparison between 9 European countries and the US is made. A sample including 472 US firms and 94 European firms is used. The time frame is 2012-2019. The results indicate consistently significant negative cumulative abnormal returns for activist hedge fund investors holding more than 20 percent of the outstanding shares. A significantly positive effect concerning hedge fund investor holding up to 10 percent has been found. Moreover, large investors holding actively managed funds with a stake between 20-30 percent have been found to be significantly negatively related to acquirer performance around the M&A announcement date.
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Faculteit der Managementwetenschappen