Susana Menéndez-Requejo

Family Firm Mergers and Acquisitions in Different Legal Environments

This study analyses family versus nonfamily firm returns under different legal environments when a merger and acquisition (M&A) is announced. The database includes 124 M&As of European-listed firms (15 countries), with acquired firms being worldwide public or private firms (23 countries), over the 2002 to 2004 period. The findings show that family ownership has a positive and significant influence on acquiring shareholder M&A valuation. However, a major shareholder ownership of 32% has a negative effect. The authors also observe that a weaker legal and institutional environment in the target country has a positive influence on acquiring shareholder valuation.

Market valuation of the analysts' recommendations: the Spanish stock market

The aim of this paper is the analysis of the return and the trading volume of the analysts’ recommendations, taking the column The Indiscrete from Cinco Días, one of the most disseminated Spanish financial newspapers, as the database in the period 1997–1999. The results show that the market reacts before the publication of the recommendations, the cumulative return for the buying recommendations being 1.13% and −2% for sells. The trading volume, in number of shares, turnover euros and number of trades are greater than average before any type of recommendations and also after buy recommendations.

Family Constitution and Business Performance: Moderating Factors

This study analyzes the relationship between implementing a Family Constitution (Protocol) and future family business performance. We analyze a unique sample of 530 Spanish family businesses. Half of these firms received financial aid from the government to implement a Family Protocol during 2003-2013. The analysis reveals that family businesses that implemented a Family Constitution had significantly improved performance within 2 years after the implementation. The positive relationship between the implementation of a Family Constitution and future firm performance is stronger for firms that had a nonfamily CEO, had multiple family owners, or were controlled by later generations.

Determinants of the acquisition of listed versus unlisted firms in different legal and institutional environments

The aim of this article is to analyse the determinants of the decision to acquire unlisted rather than listed firms in different legal and institutional environments. We estimate a probit model considering the mergers and acquisitions (M&As) announced by European listed firms (19 countries) that acquires worldwide listed or unlisted firms (36 countries) in the period 2002–2007. Our results show that managerial opportunism is a determinant in the acquisition of listed firms, occurring with greater probability in acquiring countries with low shareholder and minority shareholder protection. Information asymmetry is another relevant determinant that promotes the acquisitions of unlisted firms. Furthermore, the less developed the capital market in the country of the acquired firm, the greater the probability of acquisitions of unlisted firms. This article contributes to the M&A literature by showing that in addition to managerial opportunism and information asymmetry, the legal and institutional environments in both the acquiring and the target countries are also relevant aspects explaining the decision of whether to acquire listed or unlisted firms.

Reverse takeover: the moderating role of family ownership

ABSTRACT The aim of this study was to analyse the determinants of reverse takeovers, examining the influence of target firm shareholders’ type in the agreement. We examine reverse takeovers implemented in the Alternative Investment Market between 1999 and 2012, paying special attention to the differences between family and non-family target firms, as well as the impact of the financial crisis. We propose that family firms have a lower probability of accepting a reverse takeover (‘shell’ firm), to avoid both diluting the ownership structure (loss of control) and new shareholders entering their firm. Our main findings show that the higher the percentage of ownership held by family holders, the lower the probability of their being the target firm in a reverse takeover. This effect is maintained during the crisis period, in accordance with the expectation that family firms will have fewer financial constraints.

Mergers and acquisitions valuation: the choice of cash as payment method

This paper studies the relevance of the acquiring ownership structure and its legal and institutional environment on the decision to pay for a merger and acquisition (M&A) with cash and how this decision influences the acquiring shareholders’ M&A valuation. At the same time, we deal with the potential endogeneity problem. The results show that the acquiring ownership structure and the legal and institutional environment influence both the choice of cash as the payment method and the acquiring shareholders’ valuation, being the payment method an endogenous decision. High levels of ownership concentration in the acquiring firm or in countries with strong legal and institutional environments reduce the probability of cash paid M&As and provoke higher acquiring shareholders valuation around the announcement of an M&A paid in cash.