An Analysis of the Determinants and Shareholder Wealth Effects of Mutual Fund Mergers

2001 ◽  
Author(s):  
Narayanan Jayaraman ◽  
Ajay Khorana ◽  
Edward F. Nelling
Keyword(s):  
Mutual Fund ◽  
Shareholder Wealth ◽  
Wealth Effects ◽  
Fund Mergers

An Analysis of the Determinants and Shareholder Wealth Effects of Mutual Fund Mergers

2002 ◽  
Vol 57 (3) ◽  
pp. 1521-1551 ◽  
Author(s):  
Narayanan Jayaraman ◽  
Ajay Khorana ◽  
Edward Nelling
Keyword(s):  
Mutual Fund ◽  
Shareholder Wealth ◽  
Wealth Effects ◽  
Fund Mergers

Life after death: acquired fund performance

2018 ◽  
Vol 44 (3) ◽  
pp. 389-402 ◽  
Author(s):  
Anni Lapatto ◽  
Vesa Puttonen
Keyword(s):  
Mutual Fund ◽  
Investment Strategy ◽  
Fund Performance ◽  
Wealth Effects ◽  
Data Set ◽  
Content Type ◽  
Life After Death ◽  
Novel Approach ◽  
Equity Funds ◽  
Fund Mergers

Purpose The purpose of this paper is to study how the target fund in mutual fund mergers performed compared to the acquiring funds had they not been merged but continued on their own as buy-and-hold portfolios. Design/methodology/approach The authors develop a novel approach to examine post-merger wealth effects. The authors’ study how the target portfolios would have performed compared to the funds acquiring them had they not been merged but continued on their own as passive portfolios. The data set consists of 793 merging US equity funds from January 2003 to December 2014. Findings The authors find that the target portfolio shareholders would have been better off if the target fund had been converted from an actively managed fund to a passively managed fund that maintained their current holdings. Research limitations/implications The findings are the opposite to many previous studies who view target fund shareholders as the major beneficiaries in mutual fund mergers. Practical implications Investors receiving notification of their fund merging should reconsider their investment strategy. If they wish to maintain the original strategy of their fund, they should oppose the merger. Alternatively they may withdraw their money from the (soon-to-be) merged fund, replicate the latest portfolio of their fund, and buy-and-hold that portfolio. Originality/value The authors develop a novel approach to examine post-merger wealth effects.

Successful Cross-border Acquisitions of Latin American Financial Institutions: Identifying Success Factors

2012 ◽  
Vol 4 (3) ◽  
pp. 347-367 ◽  
Author(s):  
C. Bülent Aybar ◽  
Wendy M. Jeffus ◽  
John C. Edmunds
Keyword(s):  
Latin American ◽  
Financial Institutions ◽  
Success Factors ◽  
Market Access ◽  
Shareholder Wealth ◽  
Wealth Effects ◽  
Cross Sectional ◽  
Foreign Companies ◽  
Study Methodology ◽  
Insight Into

This article examines the shareholder wealth effects for foreign companies that announce acquisitions of financial institutions in Latin America. We examine data for 636 transactions for the period 1985–2009. We employ event study methodology coupled with a cross-sectional regression to determine if shareholders of the acquiring firm receive positive returns. The results indicate that acquirers receive positive returns when the acquisition involves a target bank in a market with low market access, high market risk, and greater control post acquisition. These findings offer improvements on previously examined variables and provide insight into a market not sufficiently examined in prior research.

scholarly journals Discount and premium awards in the context of pre-existing ESOP conditions

2006 ◽  
Vol 3 (2) ◽  
pp. 54-67
Author(s):  
Bruce A. Rosser ◽  
Jean M. Canil
Keyword(s):  
Stock Option ◽  
Shareholder Wealth ◽  
Wealth Effects ◽  
Executive Stock Option ◽  
Major Implication ◽  
Incentive Problems ◽  
The Cost

This study examines interactions between pre-award ESOP restrictive conditions and award discounts/premiums that characterized executive stock option awards in Australia from the mid-1980s to 2000. Shareholder wealth effects at award suggest that (i) shareholders generally do not gain from offering discounts because associated value increments do not exceed the cost of the discount, (ii) premium awards coupled with exercise restrictions appear to be used to ameliorate the risk of CEO opportunism associated with irregular awards, and (iii) shareholders suffer a wealth decrement when premium awards are used to ameliorate the disinvestment incentive of inferior CEO dilution protection. The second of these findings implies risk of CEO opportunism. A major implication is that award discounts/premiums are used to modify the conditions of pre-existing ESOPs that presumably are dated and no longer optimal for addressing current incentive problems. Analyses of the optimality of award discounts/premiums should take this into account.

Bank mergers and acquisitions in Greece: the financial crisis and its effect on shareholder wealth

2019 ◽  
Vol 16 (2) ◽  
pp. 273-296 ◽  
Author(s):  
Ioannis Tampakoudis ◽  
Michail Nerantzidis ◽  
Demetres Subeniotis ◽  
Apostolos Soutsas ◽  
Nikolaos Kiosses
Keyword(s):  
Financial Crisis ◽  
Mergers And Acquisitions ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Shareholder Wealth ◽  
Conclusive Evidence ◽  
Wealth Effects ◽  
Bank Mergers ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to investigate the wealth implications of bank mergers and acquisitions (M&As) in the unique Greek setting given the triple crisis phenomenon – banking, sovereign debt and economic crises – that prevailed after the global financial crisis. Design/methodology/approach The study examines bank M&As and bank transactions over the period from 1997 to 2018, as well as government-assisted M&As during the crisis. The wealth effects of bank M&As are assessed using both univariate and multivariate frameworks. Findings Findings show a neutral crisis effect on the valuation of M&As upon their announcement. However, the authors provide conclusive evidence that M&A completions are value-destroying events for acquiring banks during the crisis, far worse than in the pre-crisis period. Greek banks also fail to create value from government-assisted mergers. The results suggest that the financial stability and the prevention of further deepening of the Greek crisis with possible contagion effects were achieved at the expense of shareholders and taxpayers. Originality/value To the authors’ knowledge, this is the first study that examines the impact of the Greek triple crisis on the wealth effects of bank M&As and bank transactions. Also, the study provides first evidence with regard to the economic impact of government-assisted M&As in the European context.

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