Abstract
This study examines the effects of announcements of acquisition of assets on shareholder wealth of buyers over the period January 2000 to December 2002 in the U.K. Significant positive announcement period abnormal returns for âfitâ acquisitions of divested assets that disclosed the âsources of fundsâ are documented. Multivariate regression analysis shows that announcement period abnormal returns are significantly related to pre-announcement period abnormal returns, relative size of the acquisitions and disclosure of sources of funds. Overall, there is little or no support for the asset fit hypothesis. However, there is strong support for âFund Source Disclosureâ, âFund Source Pecking-Orderâ and âRelative Size of Acquisitionâ Hypotheses .
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