Bid Premiums on the Warsaw Stock Exchange in the Period 2000–2015

Abstract

The research presented in this article aims to identify the differentiation of bid premiums paid on the Warsaw Stock Exchange (WSE). The research covered all 466 tender offers announced on the WSE during the period 2000–2015. To ensure the homogeneity of the sample, some of these transactions (buybacks, bids on National Investment Fund shares) were excluded. The final surveyed group consisted of 296 transactions. An analysis and comparison was carried out on premiums paid by foreign and domestic bidders, premiums paid by acquirers from the same sector and from different sectors, control premiums paid for operating companies and financial companies, and finally, premiums paid during periods of economic boom and decline. The proposed hypotheses were tested using a two-sample t-test with unequal variances. The research conducted on the WSE data shows that premiums paid by foreign bidders are higher than premiums paid by domestic acquirers, premiums paid by bidders from the same sector as the target company are higher than premiums paid for the control of a company from a different sector, premiums paid during economic downturns on the capital market are higher than premiums paid during growth periods, and premiums paid for shares of operating companies are higher than premiums paid for shares of financial companies (banks, insurance companies). The differences between the premiums are statistically significant.