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

McAdam, Chris

Authors



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

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