Ring the Bells, page-25

sholtz for youré edification '..................some general commentary on TO's  in OZ

enjoy




Takeover premiums and the role of the target firm auditor There is a substantial body of prior research across many countries that document significant premiums in corporate take overs. Bargeron, Schlingemann, Stulz and Zutter (2008), for instance, s hows that target shareholders in US takeovers receive abnormal returns of 30% around the announcement of a takeover. Findings in other countries also indicate significant wealth ga ins to target shareholders. Bugeja (2005) reports takeover premiums of 28% in Australia, whilst Constantinou, Trigeorgis and Vafeas (2005) find abnormal returns of 26% in hostile UK takeovers. Various explanations have been proposed and tested to explain the size of takeover premiums. These include: synergies (e.g.. Morck, Sh leifer and Vishny, 1990; Sudarsanam, Holl and Salami, 1996 and Hietala, Kaplan and Robinson, 2003), disciplin ing of inefficient or underperforming target management (e.g., Agrawal and Jaffe, 2003 and Harford, 2003) and the differential tax treatment of alternative payment forms (e.g., Huang and Walkling, 1987; Draper and Paudyal, 1999 a nd Da Silva Rosa, Izan, Steinback and Walter, 20takeovers receive
abnormal returns of 30% around the announcement of a takeover.)