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This work is in the spirit of the literature on the understanding and analysis of the different forces that shape the takeover process. We focus on the strategic interaction among the raiders and we study their decision to enter the bidding for a target form in a context of asymmetric information. Each raider incurs a fixed takeover sunk. cost when she decides to enter the bidding. Therefore she wants to avoid bidding for the firm and losing the bid to a raider with a higher valuation. We analyze the Bayesian-Nash equilibrium in one-period, two-period and infinite period models where each raider decides whether and in which period to enter. This decision depends on the takeover cost, the target's reservation price and the distribution function of the raiders' valuations. We also consider the case where one of the raiders is a large shareholder and the role of management in maximizing the shareholders' interests. We find that raiders delay entry into the bidding when the takeover cost or the reservation price for the firm increase. Such an increase also implies a decrease in the probability of a takeover. If one of the raiders is a large shareholder, he will enter the bidding faster the bigger is the percentage of shares he owns in the target. The existence of a large shareholder will, however, discourage other raiders from entering. The shareholders of the target firm might benefit from an increase in the target's reservation price but they never profit from an increase in the takeover cost. We conclude with an empirical section that indirectly tests some of our model's implications. The results of our empirical work indicate that raiders enter the bidding faster when the management's reaction to the bid proves to be friendly. The premiums offered by the raiders and the size of the target test insignificant in determining the pre-bidding period. Finally we find that the existence of a large shareholder discourages other raiders from entry. However, the large shareholder has on average a longer pre-bidding waiting period than a raider with no ownership in the firm. / Ph. D.

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This study utilizes the discriminant analysis technique in the development of a model able to predict acquisition targets. The model is tested in a portfolio selection setting to determine its ability to identify portfolios capable of performance superior to that of the market. The sample in the model building phase is composed of seventy-one firms acquired during the years of 1976 and 1977. Another seventy-one firms were drawn randomly from the general corporate population of firms identified for the study. A total of forty-seven variables were considered, including sixteen industry adjusted variables. The variables themselves are financial ratios available in company annual reports. A five variable model is developed which includes the adjusted debt ratio, net working capital, the return on assets ratio, the adjusted net profit margin and the adjusted times interest earned ratio. There is evidence to indicate that acquired firms use less debt, are smaller, and obtain a higher return on assets than firms in the general population. The model itself achieved an overall classification accuracy of 73.9 percent. The model then was subjected to an intertemporal test of validity during the subsequent two year period. A total of 1967 firms were classified, of which 171 represented actual acquired firms. These firms represent an appropriate investment population for a small investor confronted with portfolio investment choices. The model's performance in selecting acquired firms among those that are identified as acquired is significantly superior to that provided by a random chance model. In selecting portfolios, the model is able to identify securities that provide risk-adjusted returns superior to those obtained by the market. Increasing the portfolio size indicated that the model is able to consistently provide superior portfolio performance. One interesting finding is that the performance of the non-acquired segment of the portfolio is superior to the market as well. It is hypothesized that this group represents firms that are attractive to acquisition. / Ph. D.

The goal of this study is to develop and test a conceptual framework of the impact of selected human factors on acquired firm lower level employees' perception toward acquisition success. The variables selected for inclusion in the framework have been identified from the following relevant literature in the (1) post acquisition integration area, (2) management area, and (3) strategy implementation area. The framework incorporates direct effects of employees' involvement in the integration process, extent of employees being informed about integration activities, and the amount of company support on employees' perceptions toward acquisition success. In addition, the level of integration has been included in the framework as a possible moderating variable. Based on two acquisitions , made by one firm in the U. S. banking industry, the study examines the above relationships with a number of statistical techniques. These techniques includes correlation analysis, t-test, and regression analysis. Two hundred and fifty four respondents completed the study employees' questionnaire. / Ph. D.

This dissertation examines the partial anticipation hypothesis by employing the bid-ask spread approach in market microstructure theory. Selecting the OTC bidding firms with a careful research design, this dissertation divides sample firms into firms with acquisition programs and firms without acquisition programs.

Thesis (MComm)--Stellenbosch University, 2000. / ENGLISH ABSTRACT: TAX CONSIDERATIONS OF MERGERS AND ACQUISITIONS During the past few years the South African business environment experienced a considerable increase in corporate mergers and acquisitions. At a corporate tax rate of thirty per cent, the tax implications of mergers and acquisitions have an important impact on the financial success thereof. By way of background information, a short exposition of the characteristics, the various forms and the reasons for the increase, of mergers and acquisitions is provided. Essentially a merger or acquisition entails the acquisition of either the business of, or the shares in, the target company. A comparison is drawn between the tax consequences of the above two options for both parties to mergers and acquisitions. The composition of the purchase price payable by an acquiring company in respect of the acquisition of the target company's business or shares may have far reaching tax consequences. Consequently, the most commonly used arrangements relating to payment of the purchase price are scrutinized from a tax point of view. The bulk of the study consists of an analysis of particular aspects of mergers and acquisitions, which may, depending on how a particular transaction is structured, result in important tax benefits. The analysis is directed towards, firstly, establishing the tax consequences arising from mergers and acquisitions and, secondly, suggesting tax efficient structuring methods or alerting against structuring options that may have detrimental tax results. Some of the proposed tax structuring techniques have tax efficient results for one party to the merger or acquisition, but result in corresponding negative tax effects for the other. There are, however, opportunities to structure a tax efficient transaction in such a way to ensure that both parties share in the tax benefit. lt is even possible to, in respect of certain aspects of mergers and acquisitions, achieve a tax efficient result for both parties to the transaction without any commensurate disadvantage, or without them having to share the benefits thereof. lt is important to evaluate tax planning strategies against the general antiavoidance measures contained in the doctrine of substance over form and in tax legislation. Consequently, in the final analysis, the applicability of the antiavoidance measures to the tax planning strategies proposed in this study, is considered. / AFRIKAANSE OPSOMMING: BELASTINGOORWEGINGS OM IN GEDAGTE TE HOU BY SAMESMEL TINGS EN OORNAMES VAN SUID-AFRIKAANSE MAATSKAPPYE Korporatiewe samesmeltings en oornames is 'n dinamiese en immer groeiende area van die Suid-Afrikaanse besigheidsomgewing. Teen 'n korporatiewe belastingkoers van dertig persent is die belastinggevolge van 'n samesmelting of oorname 'n belangrike faktor in die finansiele sukses daarvan. Ter agtergrondinligting word daar in hierdie studie 'n kort uiteensetting van wat 'n samesmelting en oorname behels, die verskillende vorme wat dit kan aanneem en die redes waarom samesmeltings en oornames plaasvind, gegee. In wese kan 'n samesmelting of oorname geskied deur die verkryging van of die besigheid of die aandele van 'n teikenmaatskappy. 'n Vergelyking tussen die belastingimplikasies van genoemde twee opsies word uit die perspektief van beide die verkrygende maatskappy en die teikenmaatskappy, getref. Die samestelling van die koopprys wat ingevolge 'n oorname of 'n samesmelting betaalbaar is, kan verreikende belastingimplikasies inhou. Die mees algemene wyses van betaling, en die belastinggevolge wat daaruit voortvloei, word dus geanaliseer. Die studie behels hoofsaaklik 'n ontleding van spesifieke aspekte inherent aan samesmeltings en oornames wat, afhangend van die strukturering van die transaksie, verskillende belastinggevolge inhou. Die doel met die ontleding is tweeledig, naamlik om, eerstens, die belastinggevolge van samesmeltings en oornames vas te stel en om, tweedens, enersyds voorstelle te maak vir effektiewe belastingstrukturering, en andersins te waarsku teen struktureringsopsies wat negatiewe belastinggevolge mag inhou. Sommige struktureringstegnieke hou voordelige belastinggevolge vir een party tot 'n samesmelting of oorname in, maar lei tot korresponderende nadelige belastinggevolge vir die ander party. In sommige gevalle is dit egter moontlik om 'n middeweg tussen die voordeel en korresponderende nadeel te vind, sodat die partye in die voordeel kan deel. Daar word ook aangetoon dat sommige aspekte van samesmeltings en oornames, indien dit noukeurig beplan word, belastingvoordele sonder enige korresponderende nadele vir beide partye kan inhou. Belastingbeplanningstegnieke moet egter aan die algemene teenvermydingsmaatreels wat in die leerstuk van wese bo vorm, asook in belastingwetgewing, vervat word, gemeet word. Die studie word dus afgesluit met 'n bespreking van die toepaslikheid van die algemene teenvermydingsmaatreels op die voorstelle wat gemaak word ten opsigte van belastingstruktureringsopsies.