Performance Changes and Shareholder Wealth Creation Associated with Mergers of Publicly Traded Banking Institutions

1996 ◽  
Vol 28 (3) ◽  
pp. 294 ◽  
Author(s):  
Steven J. Pilloff
Keyword(s):  
Shareholder Wealth ◽  
Wealth Creation ◽  
Publicly Traded ◽  
Banking Institutions

scholarly journals The impact of divestitures on shareholder wealth – The DACH case

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nils Teschner ◽  
Herbert Paul
Keyword(s):  
Positive Impact ◽  
Relative Size ◽  
Abnormal Returns ◽  
Shareholder Wealth ◽  
Wealth Effects ◽  
Wealth Creation ◽  
Publicly Traded ◽  
Content Type ◽  
Publicly Traded Companies ◽  
The Impact

PurposeThe purpose of this research is to study the impact of divestitures on shareholder wealth. This study covers selloffs of publicly traded companies in Germany, Austria and Switzerland (DACH region) during the period 2002–2018. It aims to understand the overall effect of selloffs on shareholder wealth as well as the impact of important influencing factors.Design/methodology/approachThis study is part of capital market studies which investigate shareholder wealth effects (abnormal returns) using event study methodology. To determine the significance of abnormal returns, a standardized cross-sectional test as suggested by Boehmer et al. (1991) was applied. The sample consists of 393 selloffs of publicly traded companies with a deal value of at least EUR 10m.FindingsThe findings confirm the overall positive impact of selloffs on shareholder wealth. The average abnormal return on the announcement day of the sample companies amounts to 1.33%. The type of buyer, the relative size of the transaction as well as the financial situation of the seller in particular seem to influence abnormal returns positively.Originality/valueThis study investigates shareholder wealth creation through selloffs in the DACH region, a largely neglected region in divestiture research, but now very relevant due to increasing pressure of active foreign investors. Sophisticated statistical methods were used to generate robust findings, which are in line with the results of similar studies for the US and the UK.

Shareholder Wealth Creation in Response to Announcements of Acquisitions of Unlisted Firms: Evidence from Spain

2012 ◽  
Author(s):  
José Emilio Farinós Viñas ◽  
Begoña Herrero Piqueras ◽  
Miguel Angel Latorre Guillem
Keyword(s):  
Shareholder Wealth ◽  
Wealth Creation ◽  
Unlisted Firms

Impact of Capital Structure on Shareholder Value in Indian Pharmaceutical Industry: An Empirical Approach Through Created Shareholder Value

2018 ◽  
Vol 19 (5) ◽  
pp. 1290-1302 ◽  
Author(s):  
Merugu Venugopal ◽  
Bhanu Prakash Sharma G. ◽  
Ravindar Reddy M.
Keyword(s):  
Capital Structure ◽  
Shareholder Value ◽  
Economic Value ◽  
Value Added ◽  
Shareholder Wealth ◽  
Vital Role ◽  
Debt Ratio ◽  
Wealth Creation ◽  
Financing Decisions ◽  
The Right

Enhancing shareholder value is one of the primary goals along with the profitability in the competitive world. Top-level management is striving for creating the higher shareholder value by making efficient decisions. Shareholder value as the key objective of the firm and measures such as economic value added, market value added, shareholder value added and created shareholder value (CSV) have gained popularity in measuring the shareholder wealth creation. Among various financing decisions, capital structure decision plays a vital role, that is, mix of debt and equity. Considering the optimal capital structure with the right balance between equity and debt is always a challenge for the financial managers, and also to run the business successfully by gaining higher profits and enhancing shareholder value. An attempt has been made to analyse the capital structure impact on shareholder value by considering CSV as a shareholder value measure in 77 Indian pharmaceutical firms listed in BSE over a period of 9 years from 2007 to 2015. Using the balanced panel data and regression models, we found that determinants such as debt–equity ratio, long-term debt ratio and short-term debt ratios have positive correlation with CSV and negatively related to total debt ratio in the absence of tax.

Shareholder wealth creation following M&A: evidence from European utility sectors

2013 ◽  
Vol 23 (10) ◽  
pp. 891-900 ◽  
Author(s):  
Sanjukta Datta ◽  
Devendra Kodwani ◽  
Howard Viney
Keyword(s):  
Shareholder Wealth ◽  
Wealth Creation

scholarly journals Corporate social responsibility: the financial impact of black economic empowerment transactions in South Africa

2011 ◽  
Vol 12 (2) ◽  
pp. 180-193 ◽  
Author(s):  
Hendrik Wolmarans ◽  
Kurt Sartorius
Keyword(s):  
South Africa ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Listed Companies ◽  
Shareholder Wealth ◽  
Economic Empowerment ◽  
Wealth Creation ◽  
Black Economic ◽  
Black Economic Empowerment ◽  
Corporate Social

Corporate social responsibility (CSR) has recently received considerable attention in literature. One of the vehicles by which companies can conform to CSR in South Africa is Black Economic Empowerment (BEE). In this regard, BEE has been employed to assist previously disadvantaged groups of investors obtain a larger share of the equity of South African listed companies. The question has often been asked whether the announcement of BEE transactions by listed companies increases shareholder wealth. This article tries to answer this question by examining the share performance of 125 BEE transactions involving 95 companies during the period January 2002 to July 2006. The results indicate a positive relation between BEE transaction announcements and shareholder wealth creation, but only during the last part of the period covered by the study.

scholarly journals Value Creation, Appropriation, and Distribution: How Firms Contribute to Societal Economic Inequality

2018 ◽  
Vol 57 (6) ◽  
pp. 983-1009 ◽  
Author(s):  
Hari Bapuji ◽  
Bryan W. Husted ◽  
Jane Lu ◽  
Raza Mir
Keyword(s):  
Value Creation ◽  
Economic Inequality ◽  
Shareholder Wealth ◽  
Value Distribution ◽  
Business And Society ◽  
Wealth Creation ◽  
Value Appropriation ◽  
Wealth Maximization ◽  
Top Executives ◽  
Shareholder Wealth Maximization

Firms are central to wealth creation and distribution, but their role in economic inequality in a society remains poorly studied. In this essay, we define and distinguish value distribution from value creation and value appropriation. We identify four value distribution mechanisms that firms engage in and argue that shareholder wealth maximization approach skews the value distribution toward shareholders and top executives, which in turn contributes to rising economic inequalities around the world. We call on organizational scholars to study the value distribution role of firms and its consequences for society, and introduce the articles in this volume of the special issue on economic inequality, business, and society.

Mutual fund trading around mergers and fund performance

2019 ◽  
Vol 16 (1) ◽  
pp. 1-20
Author(s):  
Margarita Kaprielyan ◽  
Md Miran Hossain ◽  
Charles Armah Danso
Keyword(s):  
Mutual Fund ◽  
Predictive Power ◽  
Fund Performance ◽  
Wealth Creation ◽  
Publicly Traded ◽  
Public And Private ◽  
Content Type ◽  
Fund Managers ◽  
Portfolio Holdings ◽  
Subsequent Risk

Purpose The purpose of this paper is to investigate whether mutual funds (MFs) take positions in companies that subsequently engage in M&As and whether fund managers adjust portfolio holdings in the same direction as wealth creation from mergers. Further, the study is the first to examine the relation between active trading surrounding M&As and risk-adjusted performance in MFs. Design/methodology/approach The sample includes mergers conducted by publicly traded acquirers of public and private targets over 2003–2016. Several measures of MF managerial activeness in M&As are introduced: merger trading intensity (proportional change in fund’s holdings of M&A stocks), active merger weight (deviation of the fund’s actual weights in M&A stocks and value weights) and active merger trading (deviation of the fund’s actual weights in M&A stocks from the average weights in M&A stocks across the funds within the same Center for Research in Security Prices objective). Findings Fund managers who are more vested in the firms engaged in M&As and who are more active in their trades of M&A firms generate higher contemporaneous and subsequent risk-adjusted performance, indicative of managerial skill. Active M&A trading effect on performance is economically meaningful. Originality/value This is the first study to examine whether previously documented predictive power of active institutions regarding M&As’ profitability leads to higher risk-adjusted returns for MF investors. The study introduces several measures to gauge how actively fund managers trade companies engaged in M&As and contributes to the literature on MF managers’ ability to pick stocks.

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