Determining returns to bidding firms’ shareholders using different benchmark methods

an Australian study

Research output: Contribution to journalArticle


This article revisits the determinants of cumulative abnormal returns (CAR) for bidder firm shareholders around takeover bid announcements and in particular, if bidder CAR estimates differ significantly between conditional and unconditional models. The results indicate that CAR estimation is significantly different between the two models. The conditional model is theoretically superior to the traditional unconditional model due to the former controlling for unobservable factors surrounding the bid announcement. This study shows that it is important to account for unobservable factors in growth (organic versus takeover) strategies to infer the true effect of the bidder's characteristics on CAR.

Original languageEnglish
Pages (from-to)923-960
Number of pages38
JournalAccounting & Finance
Issue number2
Early online date24 Oct 2017
Publication statusPublished - Jun 2019


  • unobservable information
  • conditional model
  • bidder announcement returns

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