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We examine the wealth effects of economic nationalism (EN) on domestic and foreign rivals of takeover targets using a novel sample of government‐blocked EU cross‐border takeover bids. We report a significant net contagion effect at bid announcement from regression models resulting in a net gain of €3 million for each rival, on average, with domestic rivals enjoying an additional gain of €10 million. Government intervention results in negative returns, which become even more negative at bid resolution, and the adverse effects are felt by both domestic and foreign rivals. All rivals lose a value of €14 million over the total bid period with domestic rivals losing an additional €17.5 million, on average. The source of the losses are not mutually exclusive and can be due to several factors, including lower future takeover likelihood, failure to capture efficiency gains or loss of economic rents. We show that EN has a significant cost, which is not confined to the EU blocking country. [ABSTRACT FROM AUTHOR]

We examine the impact of two common methods of internal restructuring, layoffs and divestitures on the survival of a sample of UK firms. Using a Poisson regression model, we find that divestitures improve survival likelihood by reducing the probability and speed of market exit via takeover or bankruptcy, whereas layoffs increase the probability and speed of market exit via bankruptcy. Surprisingly, classifying firms into financially distressed and healthy groups, we find that distressed firms are less likely to restructure. Furthermore, while divestitures improve survival likelihood in both groups, layoff firms are less likely to survive, irrespective of whether they are distressed or healthy. Our findings are consistent with event studies that examine the market reaction to layoffs and divestiture decisions, and so provide some support for the view that the market correctly values the consequences of these restructuring actions on firm survival. The results are robust to several econometric and modeling issues, including controlling for potential self-selection bias. [ABSTRACT FROM AUTHOR]

This paper empirically tests whether it is possible to generate abnormal returns from investing in a portfolio of predicted successful takeover targets. Portfolios are formed on the basis of predictions from models similar to those estimated by Palepu (1986). However, unlike Palepu (1986), the portfolios in this paper are formed using a decision rule that results in smaller portfolios with higher average takeover probabilities. This provides a stronger test of whether share prices reflect future takeover probabilities. The results show that while the models have significant explanatory power, the portfolios fail to beat the return on the market over a 12-month holding-period. [ABSTRACT FROM AUTHOR]

Focuses on issues regarding the merging of corporations, while discussing the advantages of corporate mergers to share holders. Why this takeover mechanism exists; Reference to the various aspects associated with takeovers; Approximation of stock returns for targets.