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The phenomenon of acquisitions has attracted research interest in the finance literature partly because of its impact on the u.s economy during the decade of the eighties. Whereas an impressive body of knowledge has been accumulated on this subject thus far, the hospitality literature has no empirical studies that seek to explain the nature of this phenomenon in the hospitality industry. Of particular interest in this study was the impact of acquisitions on the shareholder wealth of target hotel and restaurant shareholders. Therefore, there were three purposes in this study: 1) to determine whether stockholders of target hotel and restaurant companies involved in acquisitions earned significant additional wealth, 2) to determine whether there is a difference in the average size of additional wealth created in acquisitions involving hospitality companies versus those involving non-hospitality companies, and 3) to determine whether there is a difference in the average size of additional shareholder wealth accruing to hotel versus restaurant shareholders. The sample consisted of 39 restaurant and 18 hotel target companies acquired between 1980 and 1990. The datasource was the University of Chicago's Center for Research in Securities Prices (CRSP) database. The market model was used to predict stock returns for the target companies thirty days before and after the announcement of the acquisition. The difference between the predicted returns and actual returns for each trading day during this period constituted the abnormal return. The average abnormal returns for all the companies per trading day were cumulated and their significance determined. The results showed that the size of the additional shareholder wealth created when the restaurant companies were acquired was 8.86%, hotels was 29.86%, while the combined sample was 15.47%. These results provided evidence that hotel and restaurant shareholders earn significant abnormal returns during an acquisition, and that there is a significant difference in the size of additional shareholder wealth accruing to hospitality companies versus non-hospitality ones. Furthermore, there was a difference in the average size of abnormal returns earned by hotel shareholders versus restaurant shareholders. / Ph. D.

The separation of ownership and control in the modern corporation creates the potential for management to pursue its own self-interests at the expense of stockholder welfare. One mechanism protecting stockholders from self-interested management is the market for corporate control, or the takeover market. The literature suggests that inefficient managers, viewing the threat of takeover and resulting job displacement, have supported the enactment of antitakeover devices to protect themselves from the takeover market. The objective of this study is to provide information concerning the relationship of one type of antitakeover device, the non-fair price antitakeover amendment, to stockholder welfare. The research addresses the question: Are non-fair price antitakeover amendments being enacted to protect inefficient management at the expense of stockholder interest? This study uses accounting measures and market measures to compare the performance of firms with non-fair-price antitakeover devices with matching firm that do not have such amendments. Firm performance is used as a surrogate for management efficiency. Results of the study indicate that firms adopting these amendments exhibit lower performance than firms without such amendments. Amendments, therefore, appear to benefit inefficient managers and do not benefit stockholders. / Ph. D.

This dissertation examines the free-rider problem of entry deterrence, the profitability of a horizontal merger, and the effects of a horizontal merger on the outsiders’ profits and industry prices, in the markets where firms' capacity costs are sunk. We investigate the free-rider problem of entry deterrence in the subgame perfect Nash equilibria of a three-stage game in which in the first stage multiple incumbent firms choose their capacities simultaneously and independently, in the second stage a potential entrant, after observing the incumbent firms’ capacity vector, chooses its capacity, and in the third stage the firms engage in capacity-constrained Cournot competition. We show that the free-rider problem may occur: there are situations where both entry prevention and allowing entry are equilibria but entry prevention is Pareto superior for the incumbent firms. We also show that increasing the number of incumbent firms may cause the equilibrium price to increase and thus consumer welfare to decrease. The free-rider problem is still manifested in a modified model in which multiple potential entrants choose their capacities sequentially after the first stage incumbents’ capacity decisions. Several recent papers which theoretically analyze the profitability of a horizontal merger and its effects on the outsiders’ profits and industry prices, all observe that a merger never decreases industry prices, a merger to a monopoly is always profitable, and a merger never hurts the outsiders. However, we demonstrate, in a market for a homogeneous product where firms with sunk capacities compete in quantities and there are potential entrants, that a merger can decrease industry price and a merger of incumbent firms to a monopoly may not be profitable. We also show, in a market for a homogeneous product where firms with sunk capacities engage in capacity-constrained price competition, that a merger can hurt the outsiders. / Ph. D.

Thesis (LLM)--University of Stellenbosch, 2005. / ENGLISH ABSTRACT: This thesis compares South African and German Competition Law. The focus is the control of mergers between newspaper enterprises. It has to be asked whether special rules should apply to transactions in this field, considering the importance of an unconcentrated, competitive press from an economic and political point of view. It will be shown that South African and German Competition Law are similar in many respects. Both legal systems follow a flexible, primarily economic approach to the consideration of proposed transactions, taking into account a plurality of factors to determine potential detrimental effects of mergers on competition. Moreover, pro-competitive gains and public interest issues are recognised under South African and German law. When it comes to the control of mergers between newspaper enterprises, though, the two legal systems diverge. Only under German Competition Law, are there specific provisions for press mergers. In view of a recently proposed amendment of the German Competition Law, the appropriate form of regulation that is likely to guarantee a free press, will be investigated. It will also be analysed, whether there is a specific need for press regulation in the South African context. Even though there are no special provisions under South African Competition Law, the South African Constitution leaves space for a broader understanding of the freedom of the press. Hence, it will be examined if the South African Constitution obliges the state to enact particular laws to protect press-plurality. Moreover, it will be analysed if the South African Competition Act should be interpreted in a manner that would promote plurality of the press. In the view of the eminent role of the press for a democratic society, it will be argued in this thesis, that there is a particular need for media regulation. Notably the significant levels of concentration in both German and South African press markets raise concerns as regards the protection of a free and pluralistic press. It will be shown that there are different foreign approaches to maintaining and promoting freedom of the press and it will be suggested that South Africa recognises a need for more press-specific regulation in the future. / AFRIKAANSE OPSOMMING: Hierdie verhandeling vergelyk Suid-Afrikaanse en Duitse mededingingsreg. Dit is gefokus op beheer oor persondernemings. Die vraag word gevra of spesiale reëls van toepassing behoort te wees op transaksies in hierdie sektor, indien die politieke en ekonomiese belang van 'n ongekonsentreerde en mededingende pers in ag geneem word. Dit word uitgewys dat Suid-Afrikaanse en Duitse mededingsreg in vele opsigte soortgelyk is, wat die regulering van samesmeltings betref. Beide regsstelsels volg 'n buigsame, hoofsaaklik ekonomiese benadering tot die oorweging van 'n transaksie. Beide neem 'n veelheid van faktore in ag om te bepaal of 'n transaksie moontlik negatiewe gevolge vir mededinging het. Verder word pro-mededingende en publieke belangsaspekte in beide die Suid- Afrikaanse en Duitse reg in ag geneem. In die geval van 'n samesmelting tussen koerantondernemings verskil die twee sisteme egter. Die Duitse reg het spesiale reëls vir samesmelting van sulke ondernemings. In die lig van wysigings wat onlangs aan die Duitse mededingsreg voorgestel is, word geskikte vlakke van regulering van die pers, wat nodig is om 'n vrye pers te waarborg, ondersoek. Aandag word geskenk aan die vraag of daar'n behoefte is aan regulering van die pers in die Suid-Afrikaanse omgewing. Alhoewel die Suid-Afrikaanse Grondwet nie spesiaal daarvoor voorsiening maak nie, laat die Grondwet plek vir 'n wyer begrip van persvryeid. Dus word vasgestelof daar 'n plig op die staat is om wetgewing in te voer wat die staat dwing om perspluralisme te beskerm. Verder, word bepaal of die Suid-Afrikaanse Mededingingswet op so 'n wyse interpreteer kan word dat dit perspluralisme sal bevorder. In die lig van die sentrale rol vir 'n vrye pers in 'n demokratiese samelewing, word geargumenteer dat, daar 'n spesiale behoefte aan reguleringvan die media is. Die hoë vlakke van konsentrasie in beide die Duitse en Suid- Afrikaanse persmarkte skep besorgheid oor die beskerming van 'n vrye en pluralistiese pers in hierdie lande. Dit word aangetoon dat daar verskillende benaderings tot die beskerming en bevordering van 'n vrye pers in ander lande is en daar word voorgestel dat Suid-Afrika 'n behoefte aan meer spesifieke reëls vir regulering van die pers erken.

This thesis provides more precise characterisation of patterns, causes and consequences of takeover activity in Australia over three decades spanning from 1972 to 2004. The first contribution of the thesis is to characterise the time series behaviour of takeover activity. It is found that linear models do not adequately capture the structure of merger activity; a non-linear two-state Markov switching model works better. A key contribution of the thesis is, therefore, to propose an approach of combining a State-Space model with the Markov switching regime model in describing takeover activity. Experimental results based on our approach show an improvement over other existing approaches. We find four waves, one in the 1980s, two in the 1990s, and one in the 2000s, with an expected duration of each wave state of approximately two years. The second contribution is an investigation of the extent to which financial and macro-economic factors predict takeover activity after controlling for the probability of takeover waves. A main finding is that while stock market boom periods are empirically associated with takeover waves, the underlying driver is interest rate level. A low interest rate environment is associated with higher aggregate takeover activity. This relationship is consistent with Shleifer and Vishny (1992)'s liquidity argument that takeover waves are symptoms of lower cost of capital. Replicating the analysis to the biggest takeover market in the world, the US, reveals a remarkable consistency of results. In short, the Australian findings are not idiosyncratic. Finally, the implications for target and bidder firm shareholders are explored via investigation of takeover bid premiums and long-term abnormal returns separately between the wave and non-wave periods. This represents the third contribution to the literature of takeover waves. Findings reveal that target shareholders earn abnormally positive returns in takeover bids and bid premiums are slightly lower in the wave periods. Analysis of the returns to bidding firm shareholders suggests that the lower premiums earned by target shareholders in the wave periods may simply reflect lower total economic gains, at the margin, to takeovers made in the wave periods. It is found that bidding firms earn normal post-takeover returns (relative to a portfolio of firms matched in size and survival) if their bids are made in the non-wave periods. However, bidders who announce their takeover bids during the wave periods exhibit significant under-performance. For mergers that took place within waves, there is no difference in bid premiums and nor is there a difference in the long-run returns of bidders involved in the first half and second half of the waves. We find that none of theories of merger waves (managerial, mis-valuation and neoclassical) can fully account for the Australian takeover waves and their effects. Instead, our results suggest that a combination of these theories may provide better explanation. Given that normal returns are observed for acquiring firms, taken as a whole, we are more likely to uphold the neoclassical argument for merger activity. However, the evidence is not entirely consistent with neo-classical rational models, the under-performance effect during the wave states is consistent with the herding behaviour by firms.

Mergers and acquisitions have been demonstrated to create synergies, but not in all cases. Current research reveals that where synergies exist, these seem to accrue to the shareholders of the selling companies. Given the limitations of our qualitative research design, we find that it is important to quantify synergy before the acquisition, preferably by applying certain best practices. In an attempt to enhance understanding of the phenomenon, we find that several types of synergy exist and that their origins include efficiencies, such as economies of scale and economies in innovative activity. We further find that the bid price is an important indicator of success and that its maximum should not exceed the intrinsic value of the target, plus the value of synergies between the bidder and target. We further find that best practices exist in quantifying cost and revenue synergies and describe these separately per origin. / Management Accounting / M.Com. (Accounting)

Thesis (LLM (Mercantile Law))--University of Stellenbosch, 2007. / The freedom to transfer an undertaking is part of the employer’s freedom of contract. The transferee of an undertaking under the common law has the right to choose whether he wants to contract with employees or not. By the implementation of section 197 of the Labour Relations Act (1995) and the amended sections 197, 197A of the Labour Relations Act (2002) the legislator provides for an automatic transfer in cases where the undertaking is transferred as a going concern. The former accordance with the regulations of the insolvency law and the fact that sequestration or the winding-up of an insolvent undertaking had to be to the advantage of the creditors was lost after the legislative steps of 1995. The effects of the above-mentioned sections and especially the problems regarding the transfer of insolvent undertakings shall be analysed in this thesis. It is the aim of this thesis to examine how sections 197, 197A of the Labour Relations Act and section 38 of the Insolvency Act should be applied and interpreted to achieve social justice. This makes it necessary to examine the history and development of the South African law of transfer of an insolvent undertaking too. Section 197 of the Labour Relations Act is mostly based on European law. Although it is not the intention of this thesis to compare the European law with the South African law, several South African aspects will be examined from a European and especially German perspective.

Thesis (MBA (Business Management))--Stellenbosch University, 2008. / ENGLISH ABSTRACT: Successful merger and acquisitions (M & A) from a financial perspective increases shareholder value. This paper examines the effect of corporate mergers and acquisitions (M & A) on shareholder value. A discussion on shareholder value follows with reasons why companies choose M & A as a growth strategy. The type of M & A strategy affects the value it creates. A literature review of M & A activity during the five periods in the twentieth century, referred to as merger waves, provides an understanding of the conditions which precipitate M & A activity. However, failure of companies that engage in M & A activity has not resulted in a decline in the popularity of M & A. This study identifies and subsequently analyses data (profitability ratios) on 34 upstream oil and gas companies that have engaged in M & A activity. Profitability ratios indicate the financial performance of a company and ultimately shareholder value. In order to obtain the best possible insights into the behaviour of the identified variables and their impact on shareholder value, the specific variables are empirically tested over different time periods through the application of two statistical tests performed on the data. The empirical analysis is based on a total of 324 observations gathered by Evaluate Energy for global oil and gas companies and covers the period 1995 to 2005. The results of the different testing methods, although subject to certain limitations, give reason to believe that the M & A leads to an erosion of shareholder value. Hence the appropriate reasons for embarking on an M & A strategy and the comprehensive pre-acquisition evaluation thereof, is tantamount to M & A success. / AFRIKAANSE OPSOMMING: Vanuit ‘n finansiële oogpunt kan suksesvolle samesmeltings en aanskaffings (S & A) aandeelhouers-waarde verhoog en hierdie werkstuk ontleed die effek wat korporatiewe S & A’s op aandeelhouers-waarde het. ‘n Bespreking oor aandeelhouers-waarde volg en verskaf redes waarom maatskappye S & A’s as ‘n groeistrategie verkies en hoe die tipe S & A strategie wat gevolg word die waarde wat dit skep affekteer. Gedurende die 20ste eeu was daar vyf tydperke waarin S & A aktiwiteite hoog was, die sogenaamde “merger waves” en ‘n ontleding van literatuur gedurende hierdie tydperke verskaf ‘n begrip van die omstandighede wat aanleiding gee tot S & A aktiwiteite. Alhoewel sommige S & A’s onsuksesvol is, bly dit ‘n populêre keuse by maatskappye om aandeelhouers-waarde te probeer verhoog. Hierdie studie identifiseer en analiseer data (winsgewendheids-verhoudings) van 34 “upstream” olie- en gasmaatskappye wat een of ander tyd in ‘n S & A betrokke was. Winsgewendheids-verhoudings dui op die finansiële prestasie van maatskappye en uiteindelik op aandeelhouers-waarde. Ten einde die beste insae in die optrede van die geidentifiseerde veranderlikes en hul impak op aandeelhouers-waarde te kry, is die spesifieke veranderlikes numeries getoets oor verskillende tydperke deur middel van twee statistiese modelle. Die numeriese analises is gebaseer op 324 waarnemings deur Evaluate Energy op internasionale olie- en gasmaatskappye tussen 1995 en 2005. Die uitslae van die verskillende metodes van toets, ingesluit sekere beperkings, dui daarop dat S & A’s oor die algemeen lei tot ‘n vermindering in aandeelhouers-waarde en daarom is dit van kardinale belang om ‘n beproefde S & A strategie te ontwikkel voordat ‘n S & A aangepak word.

published_or_final_version / Business Administration / Master / Master of Business Administration