We study the short-run wealth effect of a sample of 165 foreign divestitures by UK firms 1986-1995. These foreign asset sales by UK firms lead to significantly positive shareholder wealth effects of some 4.8% over the 10 days before and after the announcement day, which are several times larger...

We propose and test a new misvaluation approach to mergers and acquisitions (Mamp;As) using a sample of 302 UK bidders and targets 1986-2002. Our model assumes that managers have insider information on book values while investors only have publicly available information. We find that bidders are...

This paper examines the effects of ex-ante misvaluation on merger activities in UK 1985-2002 using a sample of 302 bidders and targets. Adopting the methodology of M/B by Rhodes-Kropf, Robinson, and Viswananthan (2005), we decompose M/B into three components: firm-specific errors, sector-wide...

We investigate whether divestitures are associated with changes in operating performance. We evaluate the total operating performance of a pro-forma combination of seller and buyer firm in each divestiture and of the seller and buyer firms separately. We control for industry performance,...

This paper examines the empirical cross-sectional relationship between residual income and market value for UK firms. It does so because of recent claims that RI is a better measure for use by firms in internal planning and control activities than, say earnings. If such is the case then,...

In a comprehensive study of all shipping mergers and acquisitions since 1984 we document that the shareholders of both acquirer and target realize average abnormal gains of 1.2% and 3.3% respectively and both parties gain more from diversifying than focus-increasing deals. We find that acquirers...