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The performance of REIT acquirers in the post-merger period

Version 2 2024-06-04, 03:38
Version 1 2017-08-08, 12:04
conference contribution
posted on 2024-06-04, 03:38 authored by Christopher RatcliffeChristopher Ratcliffe, W Dimovski, Monica KeneleyMonica Keneley
Mergers and acquisitions are a feature of modern economies. However, research on conventional bidding firms in mergers and acquisitions (M&As) has shown, on average, shareholders are worse off in the long-run (Alexandridis, Mavrovitis and Travlos, 2012). This study examines the long-term post merger performance of US Equity Real Estate Investment Trusts (REITs) to see if this under-performance extends to the largest REIT sector in the world. In contrast to the earlier REIT data samples used by Campbell, Giambona and Sirmans (2009), we find, prior to the macroeconomic event of the financial crisis, that existing shareholders of bidding firms earn significant and positive abnormal returns. This outcome supports the synergy motive for M&As in the REIT sector. Results from announcements occurring after the onset of the financial crisis show signs of negative and significant abnormal returns, suggesting these M&As were driven by the agency and/or hubris motive.

History

Pagination

1-27

Location

Delft, The Netherlands

Start date

2017-06-28

End date

2017-07-01

Language

eng

Notes

Real Estate Markets and Economics

Publication classification

EN Other conference paper

Copyright notice

2017, European Real Estate Society

Editor/Contributor(s)

Unknown

Title of proceedings

ERES 2017 : Proceedings of The European Real Estate Society 24th Annual Conference

Event

European Real Estate Society. Conference (24th : 2017 : Delft, The Netherlands)

Publisher

European Real Estate Society

Place of publication

[Delft, The Netherlands]