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The purpose of this thesis is to further examine the market dynamics of M&As in the cleantech and renewable energy industry. This study analyzes the abnormal returns of 273 announced and 54 completed buyout acquisitions that took place between 1997 and 2014. The event study method is used to test if cleantech deals experience higher returns than traditional energy and mining deals, if deal completions display similar effects as deal announcements (which is the unique contribution of this thesis) and if homogenous deals experience higher abnormal returns than heterogeneous deals. The outcomes are that the traditional energy and mining sector outperforms the cleantech sectors in homogenous deals. That deal completions effect follows the announcements effect for 11 out of 15 groups and that homogenous deals outperform heterogeneous deals.

I examine the effects of contemporaneous credit rating and watchlist announcements on the over-the-counter U.S. corporate bond market. I find significant negative daily abnormal returns (-2.91%) over a ten-day window associated with a downgrade announcement with negative watch. The effect is particularly strong over the two-day post-event window (-1.90%), while there is some weak evidence of market timing during the four days preceding a downgrade (-0.58%). Abnormal returns following upgrades with positive watch are weaker both in terms of statistical significance and magnitude. I also observe higher abnormal bond returns following downgrades with negative watch around rating-sensitive boundaries. These results suggest that bond abnormal returns could also be driven by regulation constraints, besides the information content of the ratings. Finally, a multivariate cross-sectional analysis on abnormal returns over the two-day window following downgrades shows that the negative watchlist state is a key determinant of bond market's response even when key control variables are included. / <p>Lic.-avh. Stockholm : Handelshögskolan, 2014</p>

Investors rely on secondary information sources, like cover stories, as market indicators due to time, information and resources constraints. However, studies in the US market gave mixed results about the potential use of cover stories while no publish research could be found in South Africa related to investors reaction to cover stories or whether an understanding of investment periods, company specific characteristics or bounded rational behaviour would yield superior abnormal returns from cover stories.In total, 1218 cover stories related to publicily listed companies were recorded from FinWeek and Financial Mail for the period 1985 to 2008 and categorised based on the Likert scale developed by Arnold et al. (2007). Event study methodology was used in the research.The research found evidence that investors did pay attention to very optimistic cover stories. Positive an neutral cover stories were contrarian indicators, while negative cover stories were momentum indicators of future company investment performances and the abnormal returns for an investment portfolio based on these cover story effects were optimised by short-selling cover story companies from healthcare, general retail and general mining industries and buying shares in control companies from the same industries and company sizes. The ability to earn long-term abnormal returns proofed weak form market inefficiency for the JSE. Copyright / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

This study investigates the determinants of divestitures, the impact of divestitures on shortterm firm value and the determinants of divestiture returns in South Africa. The study is based on a sample of 46 non-financial firms listed on the Johannesburg Stock Exchange (JSE) between 2000 and 2014. Logit regressions found CEO Turnover, a measure of corporate focus and Return on Assets (ROA), a measure of corporate efficiency, to be the only statistically significant determinants of divestitures in South Africa. However, Sales growth, Return on Equity (ROE), Debt to Total Assets (D-t-A), Debt to Equity (D-t-E), the current ratio, and the interest coverage ratio did not possess statistical significance as determinants of divestitures in South Africa. The study also investigated the impact of divestitures on short-term shareholder wealth and found that divestitures have a statistically significant positive impact on short-term firm value in South Africa. Finally, the study also investigated the determinants of divestiture returns. Cross-sectional regressions conducted on the full sample of divesting firms found that leverage has a statistically significant effect on divestiture returns in South Africa; however, firm size and efficiency do not have a statistically significant effect on divestiture returns. In order to further understand the determinants of divestiture returns in South Africa the study also separated the portfolio of divesting firms into subsamples. The study found that larger firms report superior abnormal returns than smaller firms, firms with lower levels of efficiency report superior abnormal returns than firms with higher levels of efficiency, and highly-levered firms report superior abnormal returns than lower-levered firms in South Africa.

Inter corporate asset sales provide a viable alternative to mergers and acquisitions to create shareholder value for both the buyer and seller companies. Intercorporate asset sales are defined as the sale of autonomous operational assets which does not entail a change in ownership control of the seller.Mergers and acquisitions research found greater value was created by cash funded transactions compared to equity funded transactions. Contrary to mergers and acquisitions, asset sale research found equity funded transactions created greater value compared to cash funded transactions. This research provides a deeper understanding of the effect the method of payment has on the value created when selling assets, enabling management of acquiring and divesting companies to realise their maximum value creation potential.The population consisted of intercorporate asset sale transactions announced and concluded for the 11 year period from 1 January 2000 to 31 December 2011. The exact population was not known, therefore judgmental sampling was used to identify companies. Only companies listed on the Johannesburg Stock Exchange All Share Index were considered for qualifying asset sale transactions. In total 112 companies were reviewed for asset sales yielding 214 qualifying transactions which were divided in sub samples of 43 equity buyers, 68 cash buyers, 30 equity sellers and 73 cash sellers.Based on the event study methodology the short term metric of abnormal share price returns and the medium term metric of abnormal operating financial performance were used to calculate and compare the value created by equity and cash funded transactions. Both metrics concluded that equity funded asset sales created greater value compared to cash funded asset sales.Inferences were made between asset sales and mergers and acquisitions and the researcher concluded by proposing a model to optimise shareholder value. Based on the accounting performance of the buyer and the intrinsic value of the asset or target, the model is used to select the optimum combination of corporate activity and the method of payment to unlock the optimum shareholder value. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

Merger and acquisition (M&A) transactions have been the subject of numerous studies over the years. The effect of the method of payment in M&A transactions has been studied in first world countries where information transfer is regarded as being highly efficient. The aim of this research was to study the effect of the method of payment to both acquirer and target companies post the announcement of M&A transactions within the context of emerging economies. South African JSE listed firms were used as a proxy for emerging market companies.Event study methodologies are only as sound as the statistical methodologies used to conduct the tests as well as the accuracy with which expected returns can be calculated. This being so, the aim of the research was to apply rigorous testing using various event study methodologies and making use of the literature to ensure that the findings were robust and the testing thorough. The various testing methodologies did not always provide the same findings further emphasising that the results are only as conclusive and robust as the methodologies used.Using the well substantiated event study methodology it was found that target companies do not significantly outperform acquirer firms. Although target companies showed a 12.5% increase over the longest event window being a 120 day window, whilst acquirers only reported 6.40% the difference was not found to be significant. The additional returns to target companies are likely due to the bid premium to stave off competition.Results indicate that acquirer companies using shares as the method of payment do send a negative signal to the market that their shares used as the currency of exchange in the M&A transaction is inflated. As a result acquirer companies using shares underperformed acquirer companies using cash as the method of payment.Finally target companies bought where cash was used as the method of payment outperform targets bought using shares as the method of payment. This is likely due to the capital gains tax implications in the year the M&A transaction takes place where cash is the method of payment.Although South Africa is regarded as being a less efficient market than first world economies with regards to information transfer, based on the study (which focused on large capitalisation companies with high trading volumes) South Africa does show similar results to those of first-world economies for acquirer cash against acquirer share returns as well as for target cash against target share returns, when looking at the method of payment as a market signal in M&A transactions. This research did not however find significantly higher positive returns for target companies against acquirer companies returns. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

Abstract Title: Can outsiders obtain abnormal returns by imitating insider trading?- An application to trade in tech stocks on the Nasdaq Stockholm stock exchange.Comparing high and low volatile stocks. Course: JEFT27. Authors: Antonious Shalaby &amp; Reis Rexha Advisor: Benjamin Miller Key Words: Insider trading, Abnormal Returns, Event Study Purpose:This study aims to investigate if there is a possibility of achieving abnormal returns foroutsiders on the stock exchange by following insider trading. This is being done with the goalof beating the index and outperforming the majority of the market, which has long been abenchmark for investors who are constantly developing new investment strategies byincorporating new variables of information. Methodology:The purpose of this study was achieved by utilizing a quantitative approach in conjunctionwith the Event Study model. We distinguished between high and low-volatility companies, asprevious studies had justified this. Subsequently, we conducted statistical tests to determine ifthe results were significant while also exploring the possibility of long-term effects throughseveral calibrations of the event window. Theoretical perspectives:To conduct this study, considerable attention has been given to prior research in the area,including the theory of the Efficient Market Hypothesis and the concept of Informationasymmetry. Empirical foundation:The insider trading that was analyzed took place between 2019-2022 in the thirty largesttechnology companies on the Nasdaq Stockholm Stock Exchange. Companies that did notmeet the requirements for the number of data points were excluded from the analysis. In total,twenty-six companies contained sufficient data. Conclusion:The study showed that there exists a possibility of obtaining abnormal returns. However, it isconstrained. To achieve this, the outsider must buy a highly volatile stock on the day the newswas published and sell it the day after. If the restrictions are not followed, we do not find thatabnormal returns are possible in the study.

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Yes / This paper examines stock market reaction to cross-border acquisition announcements that involve Eastern European emerging-market targets. Using a unique and a manually collected dataset, we identify 125 cross-border acquisitions in which developed-market firms from France, Germany, Netherlands, and the United Kingdom acquire ownership stakes in emerging as well as developed-markets in Europe during the period January 2000 through December 2011. In line with previous findings on foreign cross-border merger and acquisitions (M&As) in emerging- markets, evidence suggests that when the target firm is located in either the Czech- Republic, Hungary, Poland, or Russia, cumulative abnormal return (CAR) to the acquiring developed-market firm shows a statistically significant increase of 1.26% over a three day event window, following the announcement. Thereby, the relative size of the acquirer to the target appears to be the only significant factor that contributes to positive acquirer returns. The result is robust to the inclusion of controls for country, industry, as well as acquirer, target, and firm specific characteristics. Moreover, cross-border M&As involving an emerging-market target result in higher value creation for the acquiring shareholders than cross-border transactions into developed-markets.