Deals Characteristics and Short-Term Stock Price Performance of Malaysian Acquirers

Abstract

This paper aims to examine the effect of deals characteristics (types of target and method of payment) on the short-term common stock returns of acquirers in acquisitions. The sample composes of acquisitions during the period from 2000 to 2013. The study finds that cash-financed acquisitions create positively significant returns to the wealth of shareholders’ of bidders. Meanwhile, types of target neither create nor destroy short-term value to the bidding firms. The indifferent result for types of targets shows that shareholders of acquiring companies do not react regardless if the target are from public or private companies.