THE CHARACTERISTICS OF BIDDER COMPANIES IN INDONESIA AND THEIR RELATION TO THE SHAREHOLDERS’ REACTION
ABSTRACT: This study examines
the characteristics of acquiring companies and their relation to the
shareholders’ reaction. The sample used in this study consists of 92 companies
(46 bidders and 46 non-bidders). With respectto financial characteristics, this
study finds that bidders have larger price to book value ratios than
non-bidders. Further analysis also finds that cash to total assets ratio, profit
before tax to total assets and operating income to total assets ratio are major
factors in categorizing the companies into bidders and non-bidders group. Using
linear regression, the result indicates that financial and corporate governance
characteristics are able to affectshareholders’ reaction around M&A
announcement.
Keywords: merger and
acquisition, corporate governance, shareholder’s reaction, abnormal return,
event study
Penulis: Anak Agung Putu Gede
Bagus Arie Susandya
Kode Jurnal: jpakuntansidd151123
