Takeovers and Bidders' Return Determinants on Announcement Dates

The goal of this article is to determine the impact of takeover announcements on bidders' return. Also, we analyze the influence of eleven independent variables on bidders' return on the day of the takeover announcement. These variables are sorted in four categories related to: the characteristics of the deal, the bidder's governance, the bidder itself and the market. Our results do not show any statistically significant abnormal rank on the announcement day (methodologically, the rank is used as a proxy of the return). However, we identify five variables as having a significant influence on bidders' stock value on the announcement date. These variables are the type of diversification, the hostility of the offer, the duality of the functions of CEO and chairman of the board of directors, the Return On Equity (ROE) and the bidder's debt to equity ratio. [PUBLICATION ABSTRACT]