Title: Reverse takeovers: an alternative to the IPO?

Authors: Apostolos Dasilas, Athanasios Koulakiotis, Pantelis Vutirakis

Addresses: Department of Accounting and Finance, University of Macedonia, 156 Egnatia Street, Thessaloniki 54006, Greece. ' Department of International and European Studies, University of Macedonia, 156 Egnatia Street, Thessaloniki 54006, Greece. ' Research Department of Piraeus Sigma-Devletoglou Securities and Investment Services S.A, 10 Stadiou Street, Athens 10564, Greece

Abstract: We examine the stock price behaviour of 23 Reverse Takeovers (RTs) that took place in the UK. A RT refers to a private company that acquires a publicly traded company in the stock exchange that is generally a cash shell. We examine the effects of the RTs on the wealth of public company|s shareholders and we find that the stock price reaction of the public firm around the announcement date does not provide any evidence of systematic pattern. The only pattern observed is the disappearance of negative Abnormal Returns (ARs) for the target after the takeover.

Keywords: reverse takeovers; going public; mergers; IPOs; initial public offerings; stock price behaviour; UK; United Kingdom; shareholder wealth; negative abnormal returns.

DOI: 10.1504/IJFSM.2009.026633

International Journal of Financial Services Management, 2009 Vol.4 No.1, pp.11 - 20

Published online: 21 Jun 2009 *

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