The Performance Implications of Hostile Takeovers of US Financial Services Firms

This paper examines the characteristics of participants in hostile financial services takeovers. We identify the wealth effects at both announcement and time of withdrawal for failed attempts, provide the first evidence of long horizon returns, examine accounting performance implications, and report changes in systematic risk for event participants. We find significant wealth gains to targets upon announcement, with asymmetric wealth declines upon withdrawal. We find insignificant wealth effects to bidders (at announcement and on withdrawal). We find negative long horizon returns for both independent targets and bidders. Systematic risk increases (decreases) for acquirers (independent targets) following the offer announcement.