New Zealand takeover evidence: firm characteristics and payment method

Abstract

Refers to previous research on the reasons for takeovers, the characteristics of bidders/targets and methods of payment. Uses 1987‐1998 New Zealand data on a sample of 28 successful bidder/target pairs to analyse their growth/value relationships and methods of payment. Shows that target firms have significantly higher book‐to‐market ratios and lower price‐earnings and price to cash flow ratios than bidders, who appeared to overpay for targets’ shares. Finds bidders with the highest growth and market value tend to use shares or mixed payments while those with lower growth use cash. Describes some less conclusive results and considers consistency with other research and theories.

Citation

Mackenzie, R., Kelleher, B. and Vos, E. (2000), "New Zealand takeover evidence: firm characteristics and payment method", Managerial Finance, Vol. 26 No. 10, pp. 55-65. https://doi.org/10.1108/03074350010766936