Are investors compensated for their sophistication and informedness for company takeovers – An Australian study

McAdam, Chris

Abstract

I determine the sophistication and information level in takeovers for four investor classes which are individuals, nominees (fund managers), superannuation (pension) funds and incorporated
companies. I also calculate their takeover returns. I find that the superannuation funds are informed and sophisticated; individuals are informed but unsophisticated; nominees are uninformed but sophisticated; and incorporated companies are uninformed and unsophisticated traders, and that the investors realise a return which is commensurate with their information and sophistication. This study improves on existing takeover return research which assumes, as a
group, institutions are synonymously informed and sophisticated, and individuals are synonymously unsophisticated and uninformed.

Citation

McAdam, C. (2020). Are investors compensated for their sophistication and informedness for company takeovers – An Australian study. Global finance journal, 44, Article 100446. https://doi.org/10.1016/j.gfj.2018.08.002

• Journal Article Type: Article
• Acceptance Date: Aug 9, 2018
• Online Publication Date: Aug 16, 2018
• Publication Date: May 20, 2020
• Deposit Date: Oct 8, 2024
• Print ISSN: 1044-0283
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 44
• Article Number: 100446
• DOI: https://doi.org/10.1016/j.gfj.2018.08.002
• Public URL: https://hull-repository.worktribe.com/output/4862841