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Fifty years of research on takeover target prediction: a historical perspective

Tunyi Tunyi Abongeh

Qualitative Research in Financial Markets, Volume: 13, Issue: 4, Pages: 482 - 502

Swansea University Author: Tunyi Tunyi Abongeh

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DOI (Published version): 10.1108/qrfm-08-2020-0169

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Purpose: This paper aims to review prior studies and presents a synthesis of the takeover prediction literature spanning the period 1968–2018. Design/methodology/approach: The paper adopts a narrative review approach. It explores prior studies on takeover target prediction from a historical perspect...

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Published in: Qualitative Research in Financial Markets
ISSN: 1755-4179
Published: Emerald 2021
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URI: https://cronfa.swan.ac.uk/Record/cronfa65114
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first_indexed 2023-11-26T11:22:06Z
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spelling v2 65114 2023-11-26 Fifty years of research on takeover target prediction: a historical perspective eefe2792c8eed5b49feede33981dfa53 Tunyi Tunyi Abongeh Tunyi Tunyi Abongeh true false 2023-11-26 BAF Purpose: This paper aims to review prior studies and presents a synthesis of the takeover prediction literature spanning the period 1968–2018. Design/methodology/approach: The paper adopts a narrative review approach. It explores prior studies on takeover target prediction from a historical perspective, focusing on the evolution and development of the literature over the 50-year period. Findings: From a historical development perspective, prior studies in the area can be partitioned into four distinct eras. Studies in the first era (1968–1985) mainly established that takeover targets share common characteristics which can be captured with financial ratios. Studies in the second era (1986–2002) developed and extended formal target prediction hypotheses. These studies concluded that it was impossible to build a successful investment strategy around takeover target prediction. Studies in the third era (2003–2009) explored similar questions using alternative modelling techniques but arrive at similar results – targets can be predicted with limited accuracy and target prediction is unlikely to lead to abnormal returns. Studies in the fourth era (2010–2018) explore implications of M&A predictability on share valuation, governance and bond prices (amongst others), but most importantly, provide some evidence that takeover prediction can lead to abnormal returns when combined with appropriate screening strategies. Originality/value: This presents the first in-depth review of the literature on takeover target prediction. It highlights the development of the literature over four distinct eras and identifies several limitations, research gaps and opportunities for future research. Given the recent decline in the literature (i.e. fourth era), this study may stimulate new research in the area. Journal Article Qualitative Research in Financial Markets 13 4 482 502 Emerald 1755-4179 Literature review, Narrative overview, M&amp;A targets, Target characteristics, Takeover prediction, Abnormal returns 27 7 2021 2021-07-27 10.1108/qrfm-08-2020-0169 http://dx.doi.org/10.1108/qrfm-08-2020-0169 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University Not Required 2024-01-03T11:18:55.4528799 2023-11-26T11:21:38.8670890 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Tunyi Tunyi Abongeh 1
title Fifty years of research on takeover target prediction: a historical perspective
spellingShingle Fifty years of research on takeover target prediction: a historical perspective
Tunyi Tunyi Abongeh
title_short Fifty years of research on takeover target prediction: a historical perspective
title_full Fifty years of research on takeover target prediction: a historical perspective
title_fullStr Fifty years of research on takeover target prediction: a historical perspective
title_full_unstemmed Fifty years of research on takeover target prediction: a historical perspective
title_sort Fifty years of research on takeover target prediction: a historical perspective
author_id_str_mv eefe2792c8eed5b49feede33981dfa53
author_id_fullname_str_mv eefe2792c8eed5b49feede33981dfa53_***_Tunyi Tunyi Abongeh
author Tunyi Tunyi Abongeh
author2 Tunyi Tunyi Abongeh
format Journal article
container_title Qualitative Research in Financial Markets
container_volume 13
container_issue 4
container_start_page 482
publishDate 2021
institution Swansea University
issn 1755-4179
doi_str_mv 10.1108/qrfm-08-2020-0169
publisher Emerald
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
url http://dx.doi.org/10.1108/qrfm-08-2020-0169
document_store_str 0
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description Purpose: This paper aims to review prior studies and presents a synthesis of the takeover prediction literature spanning the period 1968–2018. Design/methodology/approach: The paper adopts a narrative review approach. It explores prior studies on takeover target prediction from a historical perspective, focusing on the evolution and development of the literature over the 50-year period. Findings: From a historical development perspective, prior studies in the area can be partitioned into four distinct eras. Studies in the first era (1968–1985) mainly established that takeover targets share common characteristics which can be captured with financial ratios. Studies in the second era (1986–2002) developed and extended formal target prediction hypotheses. These studies concluded that it was impossible to build a successful investment strategy around takeover target prediction. Studies in the third era (2003–2009) explored similar questions using alternative modelling techniques but arrive at similar results – targets can be predicted with limited accuracy and target prediction is unlikely to lead to abnormal returns. Studies in the fourth era (2010–2018) explore implications of M&A predictability on share valuation, governance and bond prices (amongst others), but most importantly, provide some evidence that takeover prediction can lead to abnormal returns when combined with appropriate screening strategies. Originality/value: This presents the first in-depth review of the literature on takeover target prediction. It highlights the development of the literature over four distinct eras and identifies several limitations, research gaps and opportunities for future research. Given the recent decline in the literature (i.e. fourth era), this study may stimulate new research in the area.
published_date 2021-07-27T11:18:57Z
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score 11.013731

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