The Impact of Target Board Recommendations in Australian Takeovers:
" in a descriptive study, Dignam (2005) found that only 7.2% of bids during the period 1992-2001 were successful hostile bids (where the target was an Australian listed company)."
Abstract: This paper examines the impact of target board recommendations on the probability of the bid being successful in the Australian takeovers context.
...Overall, we find board hostility has statistically significant negative effect on the success rate of the bid and almost all control variables (except for the initial bid premium) are statistically significant with the correct sign. That is, we find toehold, the percentage of share required to make the bid becomes successful, and the unconditional bid have positive impact on the success rate of the bid, at least as predictive determinants prior to the release of any hostile recommendation.
Finally, like Walking (1985), we find that the initial bid premium does not have influence on the success rate of the bid. Hence our results reinstate Walking's bid premium puzzle in Australian context.
