A reexamination of analysts' earnings forecasts for takeover targets

Article Abstract:

Analysts' forecasts of earnings for a sample of companies that were identified as takeover targets are evaluated. Forecasts in the month of the takeover try announcement were found to be revised upward in a systematic fashion, indicating a takeover attempt announcement has positive information content about the target firm. Results also indicate that resistance by management to a takeover try does not destroy value. Sample data is taken from the period 1977-1988. A negative relation is found between the takeover target's q-ratio (an undervaluation and/or mismanagement measure) and earnings forecast revisions. Study is contrasted with the work of Pound.

Noncommercial research organizations, Economic aspects, Forecasts and trends, Business forecasting, Earnings per share

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The impact of industry shocks on takeover and restructuring activity

Article Abstract:

Data for 1982-1989 assesses the effect of industry shocks on the substantial amount of corporate consolidations and restructuring across 51 industries. It has been proposed that industry shocks, including innovations in financing technology, input cost changes and deregulation, have been largely responsible for corporate restructuring or consolidation in the decade of the 1980s. Empirical analysis suggests that the takeover pattern of the 1980s is the result of an industry-structure adjustment to a changing economy.

Corporate reorganizations

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The decline of takeovers and disciplinary managerial turnover

Article Abstract:

The inverse relation between performance and the probability of subsequent management turnover disappeared in the less active takeover years among companies that were not acquired. There is evidence that turnover and performance are related only in the active takeover period. It has been concluded the intensity of managerial discipline is affected by takeover activity.

Executives, Employee turnover

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