Limited information and the sustainability of unlisted-target acquirers’ returns

Manapol Ekkayokkaya, Phil Holmes, Krishna Paudyal

Research output: Contribution to journalArticle

5 Citations (Scopus)


Relaxed disclosure requirements of unlisted firms, as compared to publicly listed company, lead to limited quality and quantity of information at bid announcements, causing difficulty in valuing gains from mergers. This raises the question: are the frequently reported superior announcement-period gains to unlisted-target acquirers sustainable in the long run? Our results for the UK show that unlisted-target acquirers gain on announcement, but suffer a substantial loss in the long run. This reversal in fortune of unlisted-target acquirers is in sharp contrast to the performance of listed-target acquirers in the UK. Therefore, short-run gains for unlisted-target acquirers may result from investors' excessive optimism when faced with limited and biased information.
Original languageEnglish
Pages (from-to)1201-1227
Number of pages27
JournalJournal of Business Finance and Accounting
Issue number9-10
Publication statusPublished - Dec 2009


  • acquisitions
  • agency considerations
  • limited information
  • target status

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