IMPACT OF ACQUISTION ANNOUNCEMANTS ON STOCK RETURN OF MALAYSIAN COMPANY

7/30/2019 IMPACT OF ACQUISTION ANNOUNCEMANTS ON STOCK RETURN OF MALAYSIAN COMPANY

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3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC

RESEARCH ( 3rd ICBER 2012 ) PROCEEDING12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA

ISBN: 978-967-5705-05-2. WEBSITE: www.internationalcon erence.com.m

IMPACT OF ACQUISTION ANNOUNCEMANTS ON STOCK RETURN OF MALAYSIANCOMPANY

Seyed Hamidreza Sakaki

Faculty of Management

Multimedia University

[email protected]

Zarehan Selamat

Faculty of Management

Multimedia University

[email protected]

ABSTRACT

The study is to undertake the analysis of impact of acquisition on the stock return of acquirer companies

in Malaysia. The period of study is from year 2005 to 2007 and the samples of companies used are the 49

companies listed on the main board of Bursa Malaysia. This study considered the acquisition

announcement date as day 0 and analyzed the impact of acquisition announcement on the stock return

of acquirer company 20 days before and after acquisition announcement date. For this purpose, two

models were used which are market model and market adjusted model. By applying these two models,

the excess return that was created by the acquisition announcement was calculated. The study found

acquisition didnt bring a positive return for the shareholders of the acquirer firm.

KEY WORDS:acquisition announcement, acquirer, cumulative abnormal return, Malaysia

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1. Introduction

Evidence shows that it is challenging for merger and acquisition strategies to create value. In regards tostock return, in an efficient capital market, stock price will react to merger or acquisition

announcements. If the market is sure about the success of the merger or acquisition, we can expect an

increase in the stock price of both acquirer and target company and value creation for shareholders; if

the market is hesitant about the success of the merger or acquisition, stock price of both companies will

experience decline and create negative returns for shareholders (Gunasekaran and Selvam 2011).

Among several researches that studied the different aspects of merger and acquisition, the main

numbers of these studies had sharply focused only on the investigation of financial performance of

acquirer and target companies in the pre and post merger or acquisition period. Somehow, it is hard to

find published papers in Malaysia on how the acquirer companies are performing after acquisition. To

fulfill this gap, the current research has attempted to analyze the stock return of acquirer companies

before and after acquisition in Malaysia.


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2. Literature Review

Aristeidis, G. Samitas and Dimitris. F. Kenourgios (2007) investigated the impact of merger and

acquisition announcement on stock returns of tramp shipping firms, and how this affected their stock

values. For this purpose, they used the event study methodology and bootstrap. They indicated that

during the merger announcement, the tramp firms stock experienced a positive return.

Gunasekaran and Selvam (2011) studied the reaction of stock price of both target and acquirer company

to merger announcement by using market model method and market adjusted returns model. They

found that among thirteen mergers, there were two mergers wherethe acquirer experienced negative

abnormal returns and target companies received positive abnormal return; three mergers in which the

acquirer companies had positive abnormal returns and target companies received negative abnormalreturns; among the remaining companies, seven mergers experienced positive abnormal return not only

for the acquirer company but also for the target company and finally, for one merger, both target and

acquirer company showed negative abnormal return.

Shukla and Gekara (2010) examined the effect of merger on financial performance of acquiring firm

during pre and post merger period by using financial ratios. In addition, they analyzed the share price

behavior 20 days after and before merger announcement by using the market model and market

adjusted return model. The result indicated that stockholders experienced loss around the

announcement period. Al-Sharkas and Hassan (2010) examined the abnormal returns for bidder, target

and combined firms by applying the modified market model and EGARCH. They found that the outcome

of both methods revealed that investors of the Target Company gained significantly positive return,

meanwhile the shareholders of the acquirer company experienced significant negative return. To put in

a nutshell, the merger announcement of the bank led to create a positive return for the combined

investors.

Campa and Hernando (2004) investigated the impact of merger announcement on stock return during

1998-2000 by using Cumulative abnormal returns to target firms and Cumulative abnormal returns to

buyer firms and also returns to buyer and target firms combined around the announcement date. They

found that the shareholders of the target Company experienced a positive cumulative abnormal return

significantly that came from the merger announcement. On the other hand, the average cumulative

abnormal return to stockholders of the acquiring firm didnt differ from zero. Actually, in approximately

55% of the mergers, returns which were created for investors were negative.

The paper conducted by Mishra and Goel (2005) tested two hypotheses which were: Whether positive

or negative cumulative excess returns accrued to RIL (bidder) or RPL (target) shareholders and the

reasons thereof and Whether there is zero or negative combined excess return in the merged firm (RIL-

RPL combined) and the reasons thereof. They found that the shareholders of target company enjoy

positive excess return and the shareholders of acquirer company experienced negative return.


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Manoj and Jagandeep (2008) explored the impact of merger announcement on stock returns for

shareholders in the private banking sector by using event study methodology which included the single

factor model and the two factor model. They analyzed five mergers during 1999-2005. They showed that

merger announcement in Indian private banking sector had positive effects for both target and acquirer.

The paper written by Mangold and Lippok (2008) studied the effect of cross-border merger and

acquisition on shareholders wealth during 2000-2007 and whether this value is different from the value

that was created by a domestic merger and acquisition. For this purpose, the researchers used the event

study methodology. They found that the share return increased for the shareholders of the target

company meanwhile the results showed negative or zero abnormal returns or slightly positive return. In

addition, they found that the abnormal return is negative for cross-border deals while it's positive for

domestic transactions.

3. Methodology

With regards to stock return of company, there are many methods to measure the value created by

acquisition. In this study, the market model and market adjusted model will be used to evaluate the

immediate impact of acquisition on the share price of company because in an efficient capital market,

the share price of companies immediately react to new announcement and information. In order to

measure the impact of the acquisition on the share price of the company, the excess return has to be

calculated. Thus, for this purpose, the study considered the abnormal return of company instead ofactual return over the study period. The event day for each firm was considered as the date of stock

exchange announcement. For analyzing the immediate impact, 20 day before and after acquisition

announcement was considered. Therefore, the event day is 0 day; the days before acquisition are

considered as negative days and the days after acquisition are considered as positive days. Within this

study period, all the effects on the share price of the company were able to be captured. Although, the

longer period will capture all the immediate impact on the share price of the firm but there will be more

noise in the data.

As explained before, the abnormal return of each firm is calculated before and after acquisition based

on the market model and market adjusted model. After computations, the cumulative abnormal return(CAR) should be calculated. The CAR is the aggregate abnormal return from day -20 to day +20. The CAR

indicates the average total impact of the event across all firms or across event days.

3.1. Market model method

Based on the market model method, the expected rate of return can be calculated from the equation

below:

ARt = + .Rmt + E


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Where Rmt is the actual return on Kuala Lumpur stock market index (KLSE) for day t,, the mean returns

over the period was not explained by the market and measures sensitivity of the firm to the market.

Both and was extracted from Bloomberg information service for each company based on their event

window. This is a measure of risk and E is a statistical error term where in this study E = 0.

3.2. Market adjusted return method

Excess return for market adjusted method is calculated using the fallow equation:

ARt = Rt Rmt

ARt = abnormal return on the security for day t;Rt = Actual return on the security for day t; and

Rmt = Actual return on market index for day t

After calculating the excess return for before and after acquisition based on the market model method

and market adjusted return method, the cumulative abnormal return for Acquirer Company before and

after acquisition needs to be calculated as shown below:

CAR = ARt (t= -20 to +20)

The trend and conclusion about the stock return of the acquirer company will be compared and

observed.

3.3. Data and variables

The period of the study is from 1.1.2005 to 1.1.2008; it means that it will include all the acquisitions that

have happened in this period in Malaysia. The population of the study includes all the companies that

were acquired by other companies in Malaysia over the period of 2005 - 2008.All the data in this study

are secondary data. The data was extracted from Bloomberg information services and Share prices of

companies were extracted from the yahoo finance website.

For the sample selection, some points in this study were considered and they are as follows:

The stock price of acquirer company should be available Acquirer companies should be listed in KLSE Each company should have only one acquisition during the period due to avoid overlap

Therefore, based on the above information, there are 49 acquirer companies that have these

specifications and they constitute the sample in this study.The list of these companies is shown in Table

1.


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4. Data analysis and results

For evaluating the effect of acquisition on the share price of company, the abnormal return of share

price needs to be calculated rather than the actual price; meaning the excess return that was created by

the acquisition announcement. For this purpose, the market model and market adjusted model was

employed. The study period for this part consists of acquisition announcement date as day zero and 20

days before acquisition and 20 days after acquisition. Thus, an event window of 41 days was used,

centered on the event day.

The analysis of share price study consisted of two parts:

(1) Abnormal returns of acquirer companies on the announcement day based on the market modeland market adjusted model.

(2) The CAR of acquirer companies before and after acquisition based on the market model andmarket adjusted model.

Table clearly indicates abnormal returns of acquirer companies on the announcement day based on the

market model and market adjusted model. In respect to the market model, 26 companies out of the 49

experienced negative abnormal return, while 23 companies received positive return on the same day.

On the other hand, under the market adjusted model, 23 companies earned negative abnormal return

and 26 of them gained positive return. The abnormal returns indicate that the return was the excess ofthe actual return and it was caused by the event day. The abnormal returns for before and after

acquisition were computed to obtain the cumulative average return. The analysis of this part is

presented as shown below:

(CAR) calculated under the market model and market adjusted model for Asian Pac Holdings Bhd is

presented in APPENDIX

Table 1: The list of all acquirer company

No Date of acquisition Acquirer

1 3/18/2005 Asian Pac Holdings Bhd

2 3/15/2005 Berjaya Assets BHD

3 3/1/2005 Degem Bhd

4 2/7/2005 Dolomite Corp Bhd

5 3/17/2005 Ecofirst Consolidated Bhd

6 1/10/2005 Eden Inc Bhd

7 1/12/2005 Genting Bhd

8 3/25/2005 Genting Malaysia BHD

9 1/12/2005 Khind Holdings Bhd

10 12/13/2005 Kulim Malaysia BHD

11 3/8/2005 Lii Hen Industries BHD

12 11/18/2005 MBM Resources BHD

13 2/15/2005 Pharmaniaga Bhd


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14 11/25/2005 Scomi Marine Bhd

15 1/19/2005 Silver Bird Group Bhd

16 2/3/2005 Supermax Corp Bhd

17 2/22/2005 Symphony House Bhd

18 1/17/2005 TAN Chong Motor Holdings BHD

19 3/29/2005 Tradewinds Corp Bhd

20 12/1/2005 Wah Seong Corp Bhd

21 11/28/2006 Atlan Holdings Bhd

22 2/10/2006 Cymao Holdings Bhd

23 2/16/2006 Denko Industrial Corp Bhd

24 2/8/2006 DXN Holdings Bhd

25 12/22/2006 Eksons Corp BHD

26 3/3/2006 Furqan Business Organization BHD

27 3/3/2006 GSB Group Bhd28 12/18/2006 Integrated Logistics Bhd

29 1/31/2006 Mahajaya Bhd

30 11/7/2006 Mulpha International Bhd

31 12/1/2006 PMB Technology Bhd

32 2/28/2006 QL Resources BHD

33 2/16/2006 Ranhill Bhd

34 12/31/2006 Rex Industry Bhd

35 12/31/2006 SPK Sentosa Corp BHD

36 12/31/2006 Sumatec Resources Bhd

37 12/31/2006 TIGER SYNERGY BHD

38 1/9/2007 AirAsia BHD

39 3/13/2007 Amtel Holdings Bhd40 1/15/2007 Emas Kiara Industries Bhd

41 2/13/2007 Evergreen Fibreboard Bhd

42 3/13/2007 Fima Corp BHD

43 2/6/2007 Jaycorp Bhd

44 3/19/2007 Kuala Lumpur Kepong Bhd

45 1/31/2007 Pelikan International Corp Bhd

46 3/2/2007 Success Transformer Corp Bhd

47 3/16/2007 Top Glove Corp Bhd

48 1/17/2007 UMW Holdings Bhd

49 1/26/2007 YTL Corp Bhd

Table 2: Abnormal Returns of Acquirers on the announcement day based on the market model & market

adjusted model

No Date AcquirerMarket

model

Market Adjusted

Model

1 2004/03/19 Asian Pac Holdings Bhd -0.2953 -0.0033

2 2003/11/21 Berjaya Assets BHD -0.3101 -0.0167

3 2004/07/19 Degem Bhd -0.6652 -0.0006

4 2005/02/07 Dolomite Corp Bhd 0.0621 -0.0368


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model

Market Adjusted

Model

5 2005/03/17 Ecofirst Consolidated Bhd -0.1058 -0.0019

6 2003/06/12 Eden Inc Bhd 2.1736 -0.0025

7 2004/09/23 Genting Bhd 0.0488 0.0099

8 2005/03/25 Genting Malaysia BHD 0.0031 -0.0064

9 2005/01/12 Khind Holdings Bhd 0.4474 0.0096

10 2005/10/07 Kulim Malaysia BHD -0.1058 -0.0023

11 2005/03/08 Lii Hen Industries BHD -2.8570 -0.0212

12 2005/09/29 MBM Resources BHD 0.0437 0.0003

13 2004/09/28 Pharmaniaga Bhd -0.0454 -0.0155

14 2005/08/16 Scomi Marine Bhd -1.7350 -0.0670

15 2005/01/19 Silver Bird Group Bhd -0.1202 0.0110

16 2005/02/03 Supermax Corp Bhd 0.1632 0.0049

17 2005/02/18 Symphony House Bhd -0.0764 0.0053

18 2005/01/17 TAN Chong Motor Holdings BHD 0.2499 -0.0027

19 2003/05/13 Tradewinds Corp Bhd 0.0174 0.0116

20 2005/10/28 Wah Seong Corp Bhd 0.0225 0.0090

21 2006/11/28 Atlan Holdings Bhd 0.0674 0.0104

22 2005/06/06 Cymao Holdings Bhd -0.1148 0.0298

23 2006/02/16 Denko Industrial Corp Bhd 1.0308 -0.0010

24 2006/02/08 DXN Holdings Bhd 0.0140 -0.0103

25 2006/05/23 Eksons Corp BHD 0.2633 0.0208

26 2006/03/03 Furqan Business Organization BHD -0.0882 0.0656

27 2006/03/03 GSB Group Bhd -0.5787 0.0031

28 2006/12/18 Integrated Logistics Bhd -0.0912 -0.0125

29 2005/10/19 Mahajaya Bhd -0.4148 0.0092

30 2006/08/18 Mulpha International Bhd 0.0009 0.0086

31 2006/12/01 PMB Technology Bhd 0.2766 0.0582

32 2005/09/07 QL Resources BHD 0.0076 -0.0082

33 2006/02/16 Ranhill Bhd 0.6645 -0.0142

34 2005/02/16 Rex Industry Bhd 0.0085 0.0174

35 2006/11/22 SPK Sentosa Corp BHD -0.4616 -0.0074

36 2004/07/01 Sumatec Resources Bhd -0.2731 0.0185

37 2006/12/19 TIGER SYNERGY BHD 0.0308 0.0021

38 2007/01/09 AirAsia BHD -0.1483 -0.0117

39 2007/03/13 Amtel Holdings Bhd -0.1742 -0.0173


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model

Market Adjusted

Model

40 2007/01/15 Emas Kiara Industries Bhd -0.4445 -0.0072

41 2007/02/13 Evergreen Fibreboard Bhd -0.1906 0.0419

42 2006/09/20 Fima Corp BHD -0.1219 0.0033

43 2006/11/06 Jaycorp Bhd -0.0758 0.0182

44 2006/12/18 Kuala Lumpur Kepong Bhd 0.2754 -0.0005

45 2006/11/06 Pelikan International Corp Bhd -0.7344 0.0228

46 2006/05/10 Success Transformer Corp Bhd -0.2711 0.0546

47 2006/11/27 Top Glove Corp Bhd 0.5645 0.0005

48 2007/01/17 UMW Holdings Bhd 0.0095 0.0015

49 2007/01/26 YTL Corp Bhd -0.1579 -0.0055

Table . Based on the market model, the analysis of CAR indicates that there isnt any improvement and

positive return for the company after acquisition. In addition, the CAR analysis based on the market

adjusted model shows that the acquisition led to negative impact on stock return for the company after

the acquisition announcement day. More specifically, before acquisition the firm experienced positive

CAR except on day -20. On the other hand, after acquisition, CAR was negative for the first day but after

+1, it moved into the positive zone till +5. CAR was in the negative zone from +6 to +20. As a whole, the

results confirm that Asian Pac Holdings Bhd didnt experience any positive abnormal return, not only

based on the market model but also based on the market adjusted model after acquisition.

The result of the Cumulative Abnormal Returns (CAR) calculated under the market model and the

market adjusted model for Berjaya Assets Bhd is presented in Table . Under the market model, after the

acquisition announcement, the firm didnt earn any positive CAR return. In the market adjusted model,

the CAR had an erratic behavior after the acquisition announcement and there isnt any positive overall

impact after the acquisition announcement. It could be concluded that, Berjaya Assets Bhd didnt

experience any positive CAR after the acquisition announcement.


market adjusted model for Degem Bhd is presented in Table 5. With regards to the analysis of CAR

based on the market model, the whole study period indicated negative return only. It can be interpreted

that the acquisition wasnt welcomed by the shareholders of the firm. On the other hand, based on the

market adjusted model, the firm earned positive CAR only between +10 and +14. These outcomes imply

that the acquisition didnt create any positive impact on the share prices of the acquirer Company.


market adjusted model for Dolomite Corp Bhd is presented in Table . Based on the market model, the

analysis of CAR indicates that the firm experienced positive CAR both before and after acquisition. The

analysis of CAR under the market model clearly shows that the CAR of the firm dipped into the negative


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zone during day -20 to -14, after -14, the CAR of the firm moved to the positive zone during -13 to +12,

from +12 to +20, the CAR of the firm had erratic behavior. It can be concluded that the acquisition had a

positive impact on the share price of the company.


market adjusted model for Ecofirst Consolidated Bhd is presented in Table . In respect to the market

model, the CAR analysis manifested that the firm experienced negative CAR not only before acquisition

announcement but also after that. In contrast, it is found that in the market adjusted model, the firm

indicated a positive CAR during the study period excluding day -13 and -14. It means that the firm

earned positive CAR during the study period and the acquisition announcement had a positive impact on

the share price of the firm. The results show that these models imply a mixed impact of acquisition.


market adjusted model for Eden Inc Bhd is presented in Table the results of CAR under both the market

model and the market adjusted model show that before and after acquisition, the firm recorded a

positive CAR. In other words, the results confirm that the acquisition announcement created a positive

impact on the share price of the Acquirer Company.


market adjusted model for Genting Bhd is presented in Table the examination of CAR under the market

model clearly indicates that the acquisition brought up a positive impact on the share price of the firm

during the study period. In addition, the results based on the market adjusted model indicated a positiveCAR for the study period excluding day -19 and -20. As a whole, it is understood that the firm provided

positive returns to its investors.


market adjusted model for Genting Malaysia Bhd is presented in Table . In respect to the market model,

the results reveal that the firm earned a positive CAR for the -19 and -20 and also from -12 day to -6. The

CAR for other days is in the negative zone. With regards to the market adjusted model, only day -15 and

-19 show a positive return, the firm experienced negative CAR for other days. The above analysis

signifies that the acquisition announcement had a negative impact on the share price of the firm.

The result of the Cumulative Abnormal Returns (CAR) calculated under the market model and themarket adjusted model for Khind Holdings is presented in Table . CAR that was calculated under the

market model recorded a positive return for the firm during the study period. With regard to the market

adjusted model, the CAR was negative only for day -19 and -14 and from day 4 to 6. For the remaining

period, the firm earned a positive return. In conclusion, this study confirms that acquisition has a

positive impact on the share price of the Acquirer Company.


market adjusted model for Kulim Malaysia Bhd is presented in Table . With reference to the analysis of

CAR under the market model, there was a negative return for the acquirer for the whole study period.


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Under the market adjusted model, the firm earned negative value except for day -2 to +1. As a whole,

the table depicts that the acquisition didnt provide any positive impacts on the wealth of the

shareholders of the Acquirer Company.


market adjusted model for Lii Hen Industries Bhd is presented in Table . The firm earned a negative

return under the market model for before and after acquisition period. Similarly, the firm, under the

market adjusted model, earned a negative return excluding day -16 and -17. In conclusion, the results

recorded negative returns before and after acquisition for the firm.


market adjusted model for MBM Resources Bhd is presented in Table . The calculation under the marketmodel confirms that the firm gained positive return during the study period. On the other hand, the

results based on the market adjusted model indicate that the firm gained negative return around the

acquisition announcement date from day -6 to +6 excluding day 1. Although the firm experienced a

negative return around its acquisition announcement day, it earned a positive return for the remaining

days of the study period. As a whole, it is inferred that the acquisition brought positive value for the

shareholders.


market adjusted model for Pharmaniaga Bhd is presented in Table . It is to be noted that under the

market model, the acquisition had negative impact on the share price of the company. Likewise, underthe market adjusted model, the firm earned a negative return except for day -12, -13 and -9. Thus, this

study confirms that the acquirer company didnt earn a positive return for its shareholders and it failed

to benefit them.


market adjusted model for Scomi Marine Bhd is presented in Table . With reference to the analysis of

CAR under the market model, there was a negative return for the firm during the study period and in the

market adjusted model, there was also a negative return with the exception of day -6 and -5. This means

that the shareholders didnt receive any positive abnormal returns before and after acquisition.

The result of the Cumulative Abnormal Returns (CAR) calculated under the market model and themarket adjusted model for Silver Bird Group Bhd is presented in Table . Based on the market model, the

above analysis signifies that the firm earned negative CAR during the study period. In the market

adjusted model, the firm recorded negative return before and after acquisition excluding day -20, -16

and from day -13 to -6. It is significant that the acquisition didnt create a positive impact on the share

price of the company.


market adjusted model for Supermax Corp Bhd is presented in Table . The analysis of CAR under the

market model clearly shows that the acquisition brought a positive impact to the share price of the


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company. According to the market adjusted model, the firm earned negative value from day -20 to -12.

Later, it showed a positive impact between -11 to +20. It is concluded that the acquisition impacted the

share price of the firm positively.


market adjusted model for Symphony House Bhd is presented in Table . The computation of CAR based

on the market model, manifests that the acquisition brought a negative return for the investors. In

contrast, in respect of the market adjusted model, CAR created a positive return excluding day +16 and

+20. Thus, these models imply a mixed impact of acquisition.


market adjusted model for Tan Chong Motor Holdings Bhd is presented in Table . The results based onthe market model indicate that the acquisition brought a positive return for the share price of the

company. In addition, based on the market adjusted model, the firm earned positive CAR value from -19

to +20 except for day -17. In conclusion, this study confirms that the firm earned a positive return.


market adjusted model for Tradewinds Corp Bhd is presented in Table . In respect to the market model,

the firm gained positive return before acquisition except for day -20; also the firm earned a positive CAR

after acquisition. On the other hand, based on the market adjusted model, the company earned a

negative return from -20 day to +15 excluding day +7 and +9. After +15, it earned a positive return so

there is a positive improvement after acquisition based on the market adjusted model. As a whole, it isfound that the acquisition brought a positive impact on the share price of the company.


market adjusted model for Wah Seong Corp Bhd is presented in Table . The analysis of CAR under the

market model shows that the firm gained positive return during the study period. In addition, the

outcomes based on the market adjusted model, indicate that the CAR for the firm was positive before

acquisition from -20 to -15, after -16 the CAR dipped to the negative zone and it continued until +4.

From +4 onward, the firm continued in the positive zone until +20, excluding day +8. Thus, these results

clearly indicate that the acquisition created a positive impact on the share price of the company.

The result of the Cumulative Abnormal Returns (CAR) calculated under the market model and themarket adjusted model for Atlan Holdings Bhd is presented in Table . The analysis of CAR in the market

model shows that the firm earned a positive return from -20 to +20. On the other hand, based on the

market adjusted model, CAR moved to negative zone from day -20 to +8 and switched to positive zone

from +9 to +14. Again it slumped to negative zone from +15 to +20 except for day +18 and +17. In

conclusion, the results indicate that the acquisition created a positive impact on the share price of the

company.


market adjusted model for Cymao Holdings Bhd is presented in Table . The CAR values under the market


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model clearly show a negative return during the study period. Also with regard to the market adjusted

model, the firm achieved positive CAR during -20 to -9 excluding day -18 and -10. Later, the firm showed

negative return from -8 to +20 excluding day +9, +10, +15 and +16. Thus, the results indicate that the

acquisition didnt create any positive return for the investors of the firm.


market adjusted model for Denko Industrial Corp Bhd is presented in Table . Under the market model,

the firm gained positive CAR before and after acquisition. With respect to the market adjusted model,

CARs moved into the negative zone from day -20 to -10 and switched to positive zone during -9 to +20.

The analysis of CAR based on both models clearly indicates that the acquisition had a positive impact on

the share price of the company.


market adjusted model for DXN Holdings Bhd is presented in Table . The analysis of CAR not only based

on the market model but also based on the market adjusted model clearly shows that the firm gained

positive CAR before and after acquisition. Thus, the above results signify that the acquisition brought a

positive return for the firm based on both models.


market adjusted model for Eksons Corp Bhd is presented in Table . CAR calculated under the market

model reveals that the firm recorded a positive CAR not only before acquisition but also after

acquisition. Under the market adjusted model, the CAR of the firm was positive before acquisitionexcept for day -20, also after the acquisition CAR it was positive except for day +1, +3 and +11. In total,

the acquisition created a positive impact on the share price of the company.


market adjusted model for Furqan Business Organization Bhd is presented in Table . The examination of

CAR under the market model indicates that CAR is negative for the study period. In contrast, with regard

to the market adjusted model, the firm gained positive return both before and after acquisition except

for day -6, -2 and -1. Thus, these models imply a mixed impact of acquisition.


market adjusted model for GSB Group Bhd is presented in Table . The analysis of CAR under marketmodel clearly shows that the CAR was negative before and after acquisition. In addition, based on the

market adjusted model, the firm recorded positive CAR before acquisition except for -7, -6 and -1. After

acquisition, the firm gained negative return until day +20. The analysis represents the fact that the

acquisition created negative return for shareholders.


market adjusted model for Integrated Logistics Bhd is presented in Table . It is to be noted that under

the market model, the firm earned negative value before and after acquisition. Similarly, the firm


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recorded negative CAR under the market adjusted model for the study period except for day -19. In

conclusion, this study confirms that the acquirer firm didnt earn a positive return for shareholders.


market adjusted model for Mahajaya Bhd is presented in Table . It is significant that under both the

models, the firm earned negative return before and after acquisition, so acquirer firm didnt receive any

positive return after acquisition.


market adjusted model for Mulpha international Bhd is presented in Table . The analysis of CAR in the

market model shows that the firm earned a positive return before and after acquisition. On the other

hand, based on the market adjusted model, the firm earned a negative CAR before acquisition exceptfor day -20, -19 and from -14 to -11. After the acquisition, the acquisition brought a positive return for

shareholders of the firm except day +1, +4, +5, +11 and +12. Thus, the above results clearly indicate that

the acquisition created a positive impact on the share price of the firm after acquisition.


market adjusted model for PMB Technology Bhd is presented in Table . The calculation of CAR under the

market model shows a positive return for the firm not only before acquisition but also after acquisition.

Based on the market adjusted model, the firm recorded negative CAR during -20 to -7 and switched to

the positive zone from -6 to +5. After +5, the firm gained positive CAR on +8, +9, +15, +16, +18 and +19

and negative return for other days. In the conclusion, the acquisition brought positive value forshareholders of the company.


market adjusted model for QL Resources Bhd is presented in Table . Based on both the models, the firm

earned positive CAR before and after acquisition. On the whole, the acquisition created a positive

impact on the share price of the company.


market adjusted model for Ranhill Bhd is presented in Table . The results of CAR under market model

show that the firm gained positive return not only before acquisition but also after acquisition. The

results based on the market adjusted model, similarly confirms that the firm earned positive CAR valueduring the study period except for day -20. It is concluded that the acquisition created positive returns

for shareholders of company.


market adjusted model for PMB Rex Industry Bhd is presented in Table . With reference to market

model, the firm earned positive CAR value during the study period. On the other hand, based on the

market adjusted model, the CAR for the firm was positive both before and after acquisition except for

day -20, -10, -8, -7, -1, +9 and +10. It is significant that the acquisition made a good impact on the share

price of the company.


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market adjusted model for SPK Sentosa corp Bhd is presented in Table . Under the market model, the

firm recorded negative CAR before and after acquisition. In addition, based on the market adjusted

model, the firm entered the positive zone from -19 to -4 except for day -8 and switched to the negative

zone until day -20. The above results clearly indicate that the acquisition had a negative impact on the

share price of the firm.


market adjusted model for Sumatec Resources Bhd is presented in Table . Regarding the market model,

the firm recorded negative CAR for all days of the study period. On the other hand, CAR under the

market adjusted model, commenced its journey from the negative zone since day -20 to -12 and

dropped to the positive zone during -11 to +7 except -8 and -7 and again it crashed down to the negative

zone from day +8 onwards. The analysis represents the fact that the acquisition had a negative impact

on the share price of the firm.


market adjusted model for Tiger synergy Bhd is presented in Table . In respect to the market model, the

CAR of the firm was positive before and after acquisition. In addition, CAR under the market adjusted

model commenced its journey from the negative zone since day -20 to -17 and switched to the positive

zone from -16 to +1 and again it dipped to the negative zone until day +20 except day +10 and +12.

Thus, these models imply a mixed impact of the merger.


market adjusted model for AirAsia Bhd is presented in Table . Based on the market model, the firm

experienced only negative value during the study period; also under the market adjusted model, the

firm gained positive CAR during day -20 to +8 except for day -19, -13 and -10 and switched to the

negative zone from +9 onwards until day +20. Thus, based on the above results, its clear that the

acquisition had a negative impact on the share price of the company.


market adjusted model for Amtel Holdings Bhd is presented in Table . The examination of CAR under the

market model clearly shows that the acquisition brought a negative impact for the share price of the

company before and after acquisition. Based on the market adjusted model, before acquisition the firm

experienced negative returns except for day -20, -17 during -15 to -12 and -10 and it continued its

negative trend after acquisition until day +20; after acquisition it experienced positive return only for

day +19. As a whole, it is found that the acquisition didnt bring any positive return for shareholders of

the company.


market adjusted model for Emas Kiara Industries Bhd is presented in Table . Under the market model,

the firm didnt experience any positive CAR during the study period. Based on the market adjusted

model, the firm gained positive CAR from -20 to +7 except day -20 and -8 and after +8, it dipped to the


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negative zone until day +20. In conclusion, the acquisition didnt lead to enhancement of the return of

the share price of the company.


market adjusted model for Evergreen Fibreboard Bhd is presented in Table . The examination of CAR

under the market model clearly shows that the firm earned negative CAR before and after acquisition.

Based on the market adjusted model, before acquisition the firm recorded negative CAR except -16;

after acquisition the firm recorded positive value during day +6 to +8 , day +11 to +15 and day +17. Thus,

these models imply mixed results of acquisition.


market adjusted model for Emas Fima corp Bhd is presented in Table . The firm recorded negative CARduring the study period not only based on market model but also based on the market adjusted model.

It is clearly evident that the acquisition didnt bring any positive return for investors.


market adjusted model for Jaycorp Bhd is presented in Table . The analysis of CAR under the market

model shows that the firm recorded negative CAR before and after acquisition. Based on the market

adjusted model, the firm recorded positive CAR during -20 to -18, after day -17, it earned positive value

only for day -14, -8, +2, +3 and +12. In conclusion, the acquisition failed to create a positive return for

shareholders.


market adjusted model for Kuala Lumpur Kepong Bhd is presented in Table . Regarding the market

model, the firm experienced positive return before and after acquisition. Based on the market adjusted

model, the firm recorded positive CAR during day -20 to -17 and it dipped to the negative zone from -16

to+14 except for day +9. Day +15 onwards, it moved to the positive zone until day +19. Thus, it is found

that the acquisition had a positive impact on the share price of the firm.


market adjusted model for Pelikan International Corp Bhd is presented in Table . The analysis of CAR

under the market model clearly shows that the firm experienced negative value for CAR before and after

acquisition. Regarding the market adjusted model, before acquisition the firm earned positive returnonly on day -8, -7 and -1 but after acquisition it experienced positive return until the end of the study

period. Thus, these models imply a mixed impact of acquisition.


market adjusted model for Success Tranformer Corp Bhd is presented in Table . Under the market

model, the firm recorded negative CAR before and after acquisition. Based on the market adjusted

model, it experienced negative CAR for the whole study period except for day +1. Thus, the above

results imply that the acquisition failed to create any positive return for the investors.


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market adjusted model for Top Glove Corp Bhd is presented in Table . The results based on the market

model and the market adjusted model manifest that the firm gained positive CAR before and after

acquisition. In conclusion, the acquisition made a good impact on the share price of the company.


market adjusted model for UMW Holdings Bhd is presented in Table . Under the market model, the firm

gained positive CAR before and after acquisition. On the other hand, based on the market adjusted

model, the firm recorded negative CAR during -19 to +9 except for day -18 and it switched to the

positive zone from +10 to +20. In conclusion, it is clear that the acquisition had a good impact on the

share price of the company.


market adjusted model for YTL Corp Bhd is presented in Table . The analysis of CAR under the market

model shows that the firm experienced negative CAR before and after acquisition. On the other hand,

based on the market adjusted model, the firm experienced negative CAR only during -20 to -18 and +18

to +20. Thus, these models imply the mixed impact of acquisition.

5. Conclusion

Regarding the impact of acquisition announcement on the share price of a company, referring to

Table , there are 21 companies which experienced a positive impact and similarly 21 companies which

experienced a negative impact. Thus, the number of companies in which acquisition announcement had

a negative impact on the share price is the same as the number of companies in which acquisition

announcement had a positive impact on the share price. In other words, the acquisition announcement

didnt have any significant impact on the share price of a company and investors failed to gain a

significant positive return after the acquisition announcement. The results might be justified and

explained based on two key issues: first the efficiency of KLSE is questionable. Second, it might be the

leakage of information to investors.

As a whole, based on the results and analysis it was found that the acquisition didnt bring any positive

return for the shareholders of the firm. The acquisition didnt have any positive impact on the share

price of acquiring companies during 2005 2008 in Malaysia.

References

Al-Sharkas, A. and M. Hassan (2010). New evidence on shareholder wealth effects in bank mergers

during 1980-2000. Journal of Economics & Finance, Springer Science & Business Media B.V. 34: 326-348.


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Campa, J. M. and I. Hernando (2004). Shareholder Value Creation in European M&As. European

Financial Management, Wiley-Blackwell. 10: 47-81.

Gunasekaran, I. and M. Selvam (2011). "Impact of Mergers on Stock Return in Indian Stock Exchange

with Reference to BSE." SSRN eLibrary.

Mangold, N. R. and K. Lippok (2008). The Effect of Cross-Border Mergers and Acquisition on Shareholder

Wealth: Evidence from Germany. Journal of International Business & Economics, International Academy

of Business & Economics (IABE). 8:29-54.

Manoj, A. and S. Jagandeep (2008). Impact of Merger Announcements on Shareholders' Wealth:

Evidence from Indian Private Sector Banks. Vikalpa: The Journal for Decision Makers, Vikalpa, Indian

Institute of Management, Ahmedabad (IIMA). 33: 35-54.

Mishra, A. K. and R. Goel (2005). "Returns to Shareholders from Mergers: The Case of RIL and RPL

Merger." IIMB Management Review (Indian Institute of Management Bangalore)17(3): 69-79.

Samitas, A. G.1, et al. (2007). "Impact of mergers and acquisitions on stock returns of tramp shipping

firms." International Journal of Financial Services Management 2: 327-343.

Shukla, A. and M. G. Gekara (2010). Effects of Multinational Mergers and Acquisitions on Shareholders'

Wealth and Corporate Performance. IUP Journal of Accounting Research & Audit Practices, IUP

Publications. 9: 44-62.


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APPENDIX

Table 1: The list of all acquirer company

No Date of acquisition Acquirer

1 3/18/2005 Asian Pac Holdings Bhd

2 3/15/2005 Berjaya Assets BHD

3 3/1/2005 Degem Bhd

4 2/7/2005 Dolomite Corp Bhd

5 3/17/2005 Ecofirst Consolidated Bhd

6 1/10/2005 Eden Inc Bhd

7 1/12/2005 Genting Bhd

8 3/25/2005 Genting Malaysia BHD

9 1/12/2005 Khind Holdings Bhd

10 12/13/2005 Kulim Malaysia BHD

11 3/8/2005 Lii Hen Industries BHD

12 11/18/2005 MBM Resources BHD

13 2/15/2005 Pharmaniaga Bhd

14 11/25/2005 Scomi Marine Bhd

15 1/19/2005 Silver Bird Group Bhd

16 2/3/2005 Supermax Corp Bhd

17 2/22/2005 Symphony House Bhd

18 1/17/2005 TAN Chong Motor Holdings BHD

19 3/29/2005 Tradewinds Corp Bhd

20 12/1/2005 Wah Seong Corp Bhd

21 11/28/2006 Atlan Holdings Bhd22 2/10/2006 Cymao Holdings Bhd

23 2/16/2006 Denko Industrial Corp Bhd

24 2/8/2006 DXN Holdings Bhd

25 12/22/2006 Eksons Corp BHD

26 3/3/2006 Furqan Business Organization BHD

27 3/3/2006 GSB Group Bhd

28 12/18/2006 Integrated Logistics Bhd

29 1/31/2006 Mahajaya Bhd

30 11/7/2006 Mulpha International Bhd

31 12/1/2006 PMB Technology Bhd

32 2/28/2006 QL Resources BHD

33 2/16/2006 Ranhill Bhd34 12/31/2006 Rex Industry Bhd

35 12/31/2006 SPK Sentosa Corp BHD

36 12/31/2006 Sumatec Resources Bhd

37 12/31/2006 TIGER SYNERGY BHD

38 1/9/2007 AirAsia BHD

39 3/13/2007 Amtel Holdings Bhd

40 1/15/2007 Emas Kiara Industries Bhd

41 2/13/2007 Evergreen Fibreboard Bhd

42 3/13/2007 Fima Corp BHD

43 2/6/2007 Jaycorp Bhd

44 3/19/2007 Kuala Lumpur Kepong Bhd


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45 1/31/2007 Pelikan International Corp Bhd

46 3/2/2007 Success Transformer Corp Bhd

47 3/16/2007 Top Glove Corp Bhd

48 1/17/2007 UMW Holdings Bhd

49 1/26/2007 YTL Corp Bhd

Table 2: Abnormal Returns of Acquirers on the announcement day based on the market model & market

adjusted model


model

Market Adjusted

Model

1 2004/03/19 Asian Pac Holdings Bhd -0.2953 -0.0033

2 2003/11/21 Berjaya Assets BHD -0.3101 -0.0167

3 2004/07/19 Degem Bhd -0.6652 -0.0006

4 2005/02/07 Dolomite Corp Bhd 0.0621 -0.0368

5 2005/03/17 Ecofirst Consolidated Bhd -0.1058 -0.0019

6 2003/06/12 Eden Inc Bhd 2.1736 -0.0025

7 2004/09/23 Genting Bhd 0.0488 0.0099

8 2005/03/25 Genting Malaysia BHD 0.0031 -0.0064

9 2005/01/12 Khind Holdings Bhd 0.4474 0.0096

10 2005/10/07 Kulim Malaysia BHD -0.1058 -0.002311 2005/03/08 Lii Hen Industries BHD -2.8570 -0.0212

12 2005/09/29 MBM Resources BHD 0.0437 0.0003

13 2004/09/28 Pharmaniaga Bhd -0.0454 -0.0155

14 2005/08/16 Scomi Marine Bhd -1.7350 -0.0670

15 2005/01/19 Silver Bird Group Bhd -0.1202 0.0110

16 2005/02/03 Supermax Corp Bhd 0.1632 0.0049

17 2005/02/18 Symphony House Bhd -0.0764 0.0053

18 2005/01/17 TAN Chong Motor Holdings BHD 0.2499 -0.0027

19 2003/05/13 Tradewinds Corp Bhd 0.0174 0.011620 2005/10/28 Wah Seong Corp Bhd 0.0225 0.0090

21 2006/11/28 Atlan Holdings Bhd 0.0674 0.0104

22 2005/06/06 Cymao Holdings Bhd -0.1148 0.0298

23 2006/02/16 Denko Industrial Corp Bhd 1.0308 -0.0010

24 2006/02/08 DXN Holdings Bhd 0.0140 -0.0103

25 2006/05/23 Eksons Corp BHD 0.2633 0.0208

26 2006/03/03 Furqan Business Organization BHD -0.0882 0.0656

27 2006/03/03 GSB Group Bhd -0.5787 0.0031


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model

Market Adjusted

Model

28 2006/12/18 Integrated Logistics Bhd -0.0912 -0.0125

29 2005/10/19 Mahajaya Bhd -0.4148 0.0092

30 2006/08/18 Mulpha International Bhd 0.0009 0.0086

31 2006/12/01 PMB Technology Bhd 0.2766 0.0582

32 2005/09/07 QL Resources BHD 0.0076 -0.0082

33 2006/02/16 Ranhill Bhd 0.6645 -0.0142

34 2005/02/16 Rex Industry Bhd 0.0085 0.0174

35 2006/11/22 SPK Sentosa Corp BHD -0.4616 -0.0074

36 2004/07/01 Sumatec Resources Bhd -0.2731 0.0185

37 2006/12/19 TIGER SYNERGY BHD 0.0308 0.0021

38 2007/01/09 AirAsia BHD -0.1483 -0.0117

39 2007/03/13 Amtel Holdings Bhd -0.1742 -0.0173

40 2007/01/15 Emas Kiara Industries Bhd -0.4445 -0.0072

41 2007/02/13 Evergreen Fibreboard Bhd -0.1906 0.0419

42 2006/09/20 Fima Corp BHD -0.1219 0.0033

43 2006/11/06 Jaycorp Bhd -0.0758 0.0182

44 2006/12/18 Kuala Lumpur Kepong Bhd 0.2754 -0.0005

45 2006/11/06 Pelikan International Corp Bhd -0.7344 0.0228

46 2006/05/10 Success Transformer Corp Bhd -0.2711 0.0546

47 2006/11/27 Top Glove Corp Bhd 0.5645 0.0005

48 2007/01/17 UMW Holdings Bhd 0.0095 0.0015

49 2007/01/26 YTL Corp Bhd -0.1579 -0.0055

Table 3: CAR of Asian pac holdings bhd before & after acquisition announcement Market model &

Market Adjusted Model

Day Market Model Market Adjusted Model Day Market Model Market Adjusted Model

0 -6.2053 0.1188 - - -

-1 -5.9099 0.1221 20 -12.1347 -0.0447

-2 -5.6164 0.0872 19 -11.8388 -0.0439

-3 -5.3214 0.0922 18 -11.5417 -0.0498

-4 -5.0244 0.1325 17 -11.2425 -0.0658

-5 -4.7297 0.0914 16 -10.9466 -0.0651

-6 -4.4348 0.0971 15 -10.6499 -0.0689

-7 -4.1396 0.1013 14 -10.3536 -0.0705

-8 -3.8420 0.0432 13 -10.0581 -0.0125


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-9 -3.5465 0.0933 12 -9.7617 -0.0734

-10 -3.2493 0.0373 11 -9.4645 -0.0795

-11 -2.9542 0.0416 10 -9.1690 -0.0769

-12 -2.6593 0.0474 9 -8.8730 -0.0211

-13 -2.3595 0.1191 8 -8.5738 -0.0375

-14 -2.0663 0.1766 7 -8.2779 -0.0959

-15 -1.7709 0.1343 6 -7.9823 -0.0382

-16 -1.4736 0.1275 5 -7.6873 0.0194

-17 -1.1806 0.0951 4 -7.3924 0.0250

-18 -0.8840 0.1374 3 -7.0952 0.0192

-19 -0.5910 0.1526 2 -6.7987 0.0164-20 -0.2957 -0.0018 1 -6.5003 -0.1135

Table 4: CAR of Berjaya assets before & after acquistion announcement Market model & Market

Adjusted Model bhd


0 -0.3101 -0.0167 - - -

-1 -0.3107 -0.0570 20 -0.3090 0.0087

-2 -0.3066 0.1130 19 -0.3093 -0.0113

-3 -0.3090 -0.0003 18 -0.3098 0.0273

-4 -0.3075 -0.0169 17 -0.3095 -0.0127

-5 -0.3091 -0.0369 16 -0.3077 -0.0220

-6 -0.3092 0.0436 15 -0.3080 0.0172

-7 -0.3083 0.0138 14 -0.3081 0.0159

-8 -0.3082 -0.0078 13 -0.3084 0.0050

-9 -0.3082 -0.0075 12 -0.3088 -0.0144

-10 -0.3087 0.0178 11 -0.3089 -0.0071

-11 -0.3084 -0.0236 10 -0.3099 0.0006

-12 -0.3086 0.0031 9 -0.3097 -0.0139

-13 -0.3094 -0.0036 8 -0.3086 -0.0124

-14 -0.3084 0.0196 7 -0.3085 0.0040

-15 -0.3097 -0.0207 6 -0.3082 -0.0012

-16 -0.3093 0.0121 5 -0.3087 0.0028

-17 -0.3096 -0.0054 4 -0.3101 -0.0476

-18 -0.3093 0.0199 3 -0.3107 0.0012

-19 -0.3089 -0.0137 2 -0.3091 -0.0166

-20 -0.3089 0.0159 1 -0.3081 -0.0293


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Table 5: CAR of Degem bhd before & after acquisition announcement Market model & Market

Adjusted Model


0 -13.9525 -0.0320 - - -

-1 -13.2873 -0.0314 20 -27.3256 -0.5309

-2 -12.6275 -0.0266 19 -26.6493 -0.5252

-3 -11.9517 -0.0275 18 -25.9766 -0.5169

-4 -11.2753 -0.0289 17 -25.3081 -0.5188

-5 -10.6104 -0.0281 16 -24.6431 -0.5180

-6 -9.9400 -0.0250 15 -23.9834 -0.4804

-7 -9.2774 -0.0289 14 -23.3122 0.0155

-8 -8.6064 -0.0394 13 -22.6395 0.0104

-9 -7.9454 -0.0161 12 -21.9727 0.0097

-10 -7.2920 -0.0195 11 -21.3057 0.0090

-11 -6.6461 -0.0173 10 -20.6366 0.0066

-12 -5.9841 -0.0175 9 -19.9606 -0.0012

-13 -5.3311 -0.0041 8 -19.2953 -0.0006

-14 -4.6598 -0.0017 7 -18.6214 -0.0067

-15 -3.9954 -0.0004 6 -17.9592 -0.0038

-16 -3.3263 -0.0028 5 -17.2896 -0.0066

-17 -2.6563 -0.0059 4 -16.6241 -0.0062

-18 -1.9977 -0.0069 3 -15.9563 -0.0076

-19 -1.3374 -0.0025 2 -15.2880 -0.0094

-20 -0.6603 -0.0110 1 -14.6254 -0.0133


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Table 6: CAR of Dolomite corp bhd before & after acquisition announcement Market model & Market

Adjusted Model


0 1.2420 0.0329 - - -

-1 1.1799 0.0697 20 2.4140 0.0374

-2 1.1272 0.0426 19 2.3576 0.0326

-3 1.0686 0.0419 18 2.2948 0.0055

-4 1.0082 0.0898 17 2.2319 -0.0046

-5 0.9498 0.1459 16 2.1692 -0.0155

-6 0.8924 0.0139 15 2.1128 0.0298

-7 0.8355 0.0102 14 2.0553 -0.0074

-8 0.7743 0.0603 13 2.0004 -0.0147

-9 0.7175 0.0080 12 1.9469 0.0088

-10 0.6623 0.0170 11 1.8855 0.0295

-11 0.6067 0.0264 10 1.8266 0.0455

-12 0.5489 0.0396 9 1.7651 0.0335

-13 0.4868 0.1033 8 1.7092 0.0279

-14 0.4263 -0.0069 7 1.6502 0.0440

-15 0.3699 -0.0116 6 1.5931 0.0566

-16 0.3104 -0.0107 5 1.5370 0.0184

-17 0.2498 -0.0078 4 1.4822 0.0428

-18 0.1838 -0.0285 3 1.4246 0.0403

-19 0.1231 -0.0091 2 1.3647 0.0575

-20 0.0605 -0.0027 1 1.3024 0.0787

Table 7: CAR of Ecofirst consolidated bhd before & after acquisition announcement Market model &



0 -2.2279 0.0736 - - -

-1 -2.1221 0.0756 20 -4.3501 0.0646

-2 -2.0160 0.0348 19 -4.2444 0.0681

-3 -1.9097 0.0695 18 -4.1392 0.0356

-4 -1.8037 0.0697 17 -4.0328 0.0314

-5 -1.6979 0.0721 16 -3.9274 0.0382

-6 -1.5915 0.0673 15 -3.8217 0.0811

-7 -1.4861 0.0741 14 -3.7157 0.0392

-8 -1.3807 0.0812 13 -3.6088 0.0699

-9 -1.2753 0.0878 12 -3.5031 0.0729


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-10 -1.1689 0.1202 11 -3.3962 0.0630

-11 -1.0627 0.1175 10 -3.2907 0.0682

-12 -0.9560 0.0717 9 -3.1840 0.0193

-13 -0.8492 -0.0686 8 -3.0776 0.0546

-14 -0.7435 -0.0226 7 -2.9713 0.0506

-15 -0.6375 0.0173 6 -2.8655 0.0529

-16 -0.5319 0.0217 5 -2.7596 0.0540

-17 -0.4254 0.0160 4 -2.6537 0.0553

-18 -0.3194 0.0161 3 -2.5480 0.0583

-19 -0.2131 0.0127 2 -2.4413 0.0504

-20 -0.1067 0.0074 1 -2.3344 0.0795

Table 8: CAR of Eden inc bhd before & after acquisition announcement Market model & Market

Adjusted Model


0 45.6523 0.1992 - - -

-1 43.4787 0.2017 20 89.1231 0.0959

-2 41.3036 0.1631 19 86.9507 0.0934

-3 39.1313 0.1597 18 84.7781 0.1036

-4 36.9574 0.1263 17 82.6061 0.1338

-5 34.7847 0.1374 16 80.4315 0.1293

-6 32.6085 0.1392 15 78.2575 0.1337

-7 30.4361 0.1366 14 76.0785 0.1719

-8 28.2621 0.1407 13 73.9024 0.1859

-9 26.0890 0.1412 12 71.7289 0.1997

-10 23.9162 0.1404 11 69.5557 0.2004

-11 21.7405 0.1648 10 67.3798 0.1897

-12 19.5634 0.2072 9 65.2067 0.2019

-13 17.3916 0.1769 8 63.0325 0.2072

-14 15.2170 0.1844 7 60.8615 0.1982

-15 13.0409 0.1853 6 58.6877 0.2245

-16 10.8673 0.1756 5 56.5145 0.2256

-17 8.6931 0.1935 4 54.3422 0.1994

-18 6.5200 0.1128 3 52.1696 0.2312

-19 4.3468 0.0998 2 49.9960 0.2664

-20 2.1736 0.0426 1 47.8252 0.2457


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Table 9: CAR of Genting bhd before & after acquisition announcement Market model & Market

Adjusted Model


0 1.2100 0.0763 - - -

-1 1.1612 0.0664 20 2.2847 0.0466

-2 1.1205 0.0679 19 2.2298 0.0411

-3 1.0668 0.0617 18 2.1805 0.0730

-4 1.0042 0.0684 17 2.1265 0.0730

-5 0.9474 0.0586 16 2.0719 0.0735

-6 0.8865 0.0640 15 2.0192 0.0784

-7 0.8377 0.0599 14 1.9669 0.0711

-8 0.7845 0.0710 13 1.9122 0.0776

-9 0.7199 0.0966 12 1.8617 0.0749

-10 0.6608 0.0768 11 1.8167 0.0679

-11 0.6116 0.0963 10 1.7673 0.0702

-12 0.5455 0.0758 9 1.7094 0.0554

-13 0.4860 0.0740 8 1.6554 0.0613

-14 0.4369 0.0581 7 1.6067 0.0860

-15 0.3831 0.0457 6 1.5357 0.0874

-16 0.3076 0.0370 5 1.4756 0.0743

-17 0.2530 0.0375 4 1.4167 0.0539

-18 0.1887 0.0262 3 1.3607 0.0614

-19 0.1300 -0.0102 2 1.3110 0.0759

-20 0.0583 -0.0033 1 1.2678 0.0793


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Table 10: CAR of Genting Malaysia bhd before & after acquisition announcement Market model &



0 -0.0195 -0.0665 - - -

-1 -0.0225 -0.0601 20 -0.0224 -0.0413

-2 -0.0259 -0.0432 19 -0.0114 -0.0427

-3 -0.0323 -0.0350 18 -0.0246 -0.0412

-4 -0.0190 -0.0429 17 -0.0343 -0.0364

-5 -0.0030 -0.0420 16 -0.0376 -0.0196

-6 0.0066 -0.0428 15 -0.0229 -0.0283

-7 0.0020 -0.0208 14 -0.0177 -0.0317

-8 0.0024 -0.0368 13 -0.0249 -0.0231

-9 0.0083 -0.0306 12 -0.0426 -0.0243

-10 0.0069 -0.0059 11 -0.0359 -0.0285

-11 0.0017 -0.0035 10 -0.0493 -0.0376

-12 0.0093 -0.0181 9 -0.0556 -0.0294

-13 -0.0041 -0.0213 8 -0.0561 -0.0567

-14 -0.0179 -0.0043 7 -0.0403 -0.0396

-15 -0.0309 0.0121 6 -0.0467 -0.0160

-16 -0.0235 -0.0024 5 -0.0298 -0.0579

-17 -0.0195 -0.0306 4 -0.0402 -0.0580

-18 -0.0072 -0.0229 3 -0.0280 -0.0653

-19 0.0095 -0.0228 2 -0.0206 -0.0700

-20 0.0007 0.0196 1 -0.0143 -0.0848

Table 11: CAR of Khind holdings before & after acquisition announcement Market model & Market

Adjusted Model


0 9.4072 0.0147 - - -

-1 8.9598 0.0051 20 18.3953 0.0561

-2 8.5177 0.0421 19 17.9450 0.0289

-3 8.0703 0.0072 18 17.4968 0.0179

-4 7.6248 0.0136 17 17.0510 0.0238

-5 7.1773 0.0288 16 16.6034 0.0264

-6 6.7316 0.0222 15 16.1574 0.0320

-7 6.2818 0.0207 14 15.7023 0.0451

-8 5.8307 0.0168 13 15.2529 0.0444

-9 5.3800 0.0138 12 14.8052 0.0468


27/58

788




-10 4.9326 0.0038 11 14.3557 0.0078

-11 4.4842 0.0049 10 13.9051 0.0048

-12 4.0350 0.0045 9 13.4540 0.0136

-13 3.5858 0.0169 8 13.0072 0.0176

-14 3.1355 -0.0114 7 12.5561 0.0010

-15 2.6902 0.0205 6 12.1033 -0.0058

-16 2.2392 0.0042 5 11.6509 -0.0249

-17 1.7884 0.0258 4 11.2008 -0.0270

-18 1.3434 0.0454 3 10.7549 0.0037

-19 0.8936 -0.0079 2 10.3073 0.0187

-20 0.4443 0.0044 1 9.8558 0.0016

Table 12: CAR of Kulim Malaysia bhd before & after acquisition announcement Market model &


Day Market ModelMarket Adjusted

ModelDay Market Model Market Adjusted Model

0 -2.1696 0.0130 - - -

-1 -2.0639 0.0153 20 -4.2813 -0.0530

-2 -1.9578 0.0002 19 -4.1729 -0.0521

-3 -1.8584 -0.0436 18 -4.0648 -0.0331

-4 -1.7534 -0.0335 17 -3.9567 -0.0393

-5 -1.6457 -0.0359 16 -3.8581 -0.0775

-6 -1.5473 -0.0288 15 -3.7627 -0.0683

-7 -1.4429 -0.0291 14 -3.6610 -0.0668

-8 -1.3334 -0.0325 13 -3.5557 -0.0791

-9 -1.2338 -0.0262 12 -3.4525 -0.0863

-10 -1.1353 -0.0227 11 -3.3486 -0.0862

-11 -1.0293 -0.0347 10 -3.2362 -0.0839

-12 -0.9261 -0.0235 9 -3.1285 -0.0602

-13 -0.8231 -0.0373 8 -3.0203 -0.0592

-14 -0.7170 -0.0315 7 -2.9020 -0.0538

-15 -0.6151 -0.0231 6 -2.7952 -0.0447

-16 -0.5151 -0.0205 5 -2.6890 -0.0284

-17 -0.4195 -0.0152 4 -2.5824 -0.0196

-18 -0.3138 -0.0057 3 -2.4761 -0.0175

-19 -0.2041 -0.0129 2 -2.3722 -0.0037

-20 -0.1021 -0.0012 1 -2.2674 0.0227


28/58

789





29/58

790




Table 13: CAR of Lii hen industries bhd before & after acquisition announcement Market model &



0 -60.6509 -0.1610 - - -

-1 -57.7939 -0.1398 20 -118.4492 -0.5089

-2 -54.9351 -0.1851 19 -115.5766 -0.4753

-3 -52.0335 -0.1824 18 -112.6548 -0.4555

-4 -49.1390 -0.1706 17 -109.7907 -0.4603

-5 -46.2270 -0.2002 16 -106.8790 -0.4676

-6 -43.3057 -0.1812 15 -103.9772 -0.4338

-7 -40.4380 -0.1098 14 -101.0778 -0.4098

-8 -37.5535 -0.0838 13 -98.2026 -0.3802

-9 -34.6862 -0.0860 12 -95.3230 -0.3525

-10 -31.7809 -0.0536 11 -92.4439 -0.3254

-11 -28.8970 -0.0349 10 -89.5713 -0.3399

-12 -26.0003 -0.0200 9 -86.6572 -0.2746

-13 -23.0960 -0.0193 8 -83.7375 -0.2680

-14 -20.1838 -0.0088 7 -80.8312 -0.2354

-15 -17.2904 -0.0113 6 -77.9547 -0.2036

-16 -14.4122 0.0078 5 -75.0677 -0.2195

-17 -11.5506 0.0530 4 -72.1692 -0.1939

-18 -8.6764 -0.1078 3 -69.2860 -0.1864

-19 -5.8136 -0.0706 2 -66.4110 -0.1914

-20 -2.8867 -0.0632 1 -63.5089 -0.1607


30/58

791




Table 14: CAR of MBM Resources bhd before & after acquisition announcement Market model &



0 0.9345 -0.0036 - - -

-1 0.8908 -0.0039 20 1.7952 0.0146

-2 0.8499 -0.0036 19 1.7519 0.0212

-3 0.8034 -0.0046 18 1.7075 0.0218

-4 0.7562 -0.0010 17 1.6634 0.0256

-5 0.7133 -0.0023 16 1.6242 0.0164

-6 0.6689 -0.0056 15 1.5823 0.0179

-7 0.6243 0.0136 14 1.5407 0.0189

-8 0.5816 0.0123 13 1.5050 0.0134

-9 0.5363 0.0137 12 1.4626 0.0154

-10 0.4900 0.0011 11 1.4198 0.0139

-11 0.4412 0.0065 10 1.3773 0.0086

-12 0.3982 0.0166 9 1.3346 0.0071

-13 0.3574 0.0204 8 1.2906 0.0109

-14 0.3123 0.0104 7 1.2470 0.0104

-15 0.2672 0.0078 6 1.1995 -0.0045

-16 0.2254 0.0054 5 1.1565 0.0018

-17 0.1741 0.0097 4 1.1137 -0.0071

-18 0.1282 0.0118 3 1.0670 -0.0003

-19 0.0837 0.0010 2 1.0236 -0.0047

-20 0.0402 0.0005 1 0.9817 0.0004

Table 15: CAR of Pharmaniaga bhd before & after acquisition announcement Market model & Market

Adjusted Model


0 -0.8821 -0.0274 - - -

-1 -0.8368 -0.0118 20 -1.7369 -0.0241

-2 -0.7879 -0.0107 19 -1.6944 -0.0331

-3 -0.7469 -0.0269 18 -1.6489 -0.0270

-4 -0.7011 -0.0122 17 -1.6099 -0.0120

-5 -0.6508 -0.0224 16 -1.5673 -0.0306

-6 -0.6076 -0.0227 15 -1.5217 -0.0247

-7 -0.5693 -0.0161 14 -1.4788 -0.0343

-8 -0.5279 -0.0233 13 -1.4361 -0.0149

-9 -0.4887 0.0005 12 -1.3924 -0.0159


31/58

792




-10 -0.4428 -0.0224 11 -1.3484 -0.0173

-11 -0.3993 -0.0137 10 -1.3058 -0.0167

-12 -0.3622 0.0038 9 -1.2609 -0.0194

-13 -0.3220 0.0077 8 -1.2130 -0.0263

-14 -0.2764 -0.0149 7 -1.1674 -0.0299

-15 -0.2400 -0.0248 6 -1.1266 -0.0269

-16 -0.2000 -0.0206 5 -1.0836 -0.0269

-17 -0.1543 -0.0243 4 -1.0377 -0.0124

-18 -0.1112 -0.0245 3 -1.0040 -0.0182

-19 -0.0800 -0.0276 2 -0.9643 -0.0231

-20 -0.0374 -0.0079 1 -0.9241 -0.0193

Table 16: CAR of Scomi Marine bhd before & after acquisition announcement Market model & Market

Adjusted Model


0 -36.3178 -0.1601 - - -

-1 -34.5828 -0.0930 20 -70.9705 -0.7377

-2 -32.8266 -0.0238 19 -69.2367 -0.7451

-3 -31.0983 -0.0334 18 -67.4963 -0.7364

-4 -29.3578 -0.0112 17 -65.7685 -0.7540

-5 -27.6119 0.0083 16 -64.0407 -0.6772

-6 -25.8725 0.0392 15 -62.3033 -0.5994

-7 -24.1541 -0.0348 14 -60.5934 -0.5755

-8 -22.4181 -0.0421 13 -58.8678 -0.5094

-9 -20.6671 -0.0393 12 -57.1384 -0.7855

-10 -18.9671 -0.0433 11 -55.4060 -0.7736

-11 -17.2447 -0.0295 10 -53.6640 -0.7305

-12 -15.5160 -0.0029 9 -51.9379 -0.7169

-13 -13.7933 -0.0315 8 -50.1884 -0.5383

-14 -12.0690 -0.0236 7 -48.4533 -0.5399

-15 -10.3276 -0.0276 6 -46.7049 -0.5326

-16 -8.5853 -0.0373 5 -44.9803 -0.5492

-17 -6.8547 -0.0478 4 -43.2488 -0.5306

-18 -5.1736 -0.0233 3 -41.5134 -0.5094

-19 -3.4368 -0.0255 2 -39.7877 -0.4677

-20 -1.7262 -0.0071 1 -38.0491 -0.1845


32/58

793




Table 17: CAR of Silver bird group bhd before & after acquisition announcement Market model &



0 -2.4820 -0.0386 - - -

-1 -2.3618 -0.0496 20 -4.8828 -0.0435

-2 -2.2459 -0.0097 19 -4.7608 -0.0223

-3 -2.1283 -0.0333 18 -4.6418 -0.0222

-4 -2.0068 -0.0124 17 -4.5210 -0.0080

-5 -1.8883 -0.0031 16 -4.3992 -0.0134

-6 -1.7708 0.0165 15 -4.2762 -0.0296

-7 -1.6586 0.0122 14 -4.1559 -0.0321

-8 -1.5412 0.0152 13 -4.0377 -0.0395

-9 -1.4256 0.0216 12 -3.9219 -0.0336

-10 -1.3081 0.0243 11 -3.8042 -0.0310

-11 -1.1924 0.0304 10 -3.6882 -0.0345

-12 -1.0725 0.0289 9 -3.5632 -0.0368

-13 -0.9514 0.0077 8 -3.4438 -0.0465

-14 -0.8308 -0.0040 7 -3.3261 -0.0264

-15 -0.7133 -0.0011 6 -3.2065 -0.0187

-16 -0.5950 0.0000 5 -3.0860 -0.0216

-17 -0.4758 -0.0004 4 -2.9650 -0.0081

-18 -0.3566 -0.0095 3 -2.8481 -0.0128

-19 -0.2363 -0.0118 2 -2.7270 -0.0167

-20 -0.1209 0.0035 1 -2.6043 -0.0324

Table 18: CAR of Supermax corp bhd before & after acquisition announcement Market model &



0 3.4616 0.0376 - - -

-1 3.2984 0.0327 20 6.7167 0.0572

-2 3.1316 0.0393 19 6.5447 0.0643

-3 2.9688 0.0466 18 6.3733 0.0709

-4 2.8082 0.0310 17 6.2145 0.0747

-5 2.6483 0.0144 16 6.0536 0.0677

-6 2.4799 0.0226 15 5.8978 0.0769

-7 2.3203 0.0314 14 5.7449 0.0834

-8 2.1640 0.0328 13 5.5761 0.0917

-9 2.0070 0.0266 12 5.4122 0.0875


33/58

794




-10 1.8454 0.0327 11 5.2433 0.0754

-11 1.6750 0.0130 10 5.0856 0.0900

-12 1.5080 -0.0104 9 4.9215 0.1021

-13 1.3492 -0.0151 8 4.7613 0.0987

-14 1.1843 -0.0142 7 4.6033 0.0934

-15 1.0170 -0.0027 6 4.4476 0.1056

-16 0.8388 -0.0032 5 4.2864 0.1031

-17 0.6714 -0.0180 4 4.1207 0.0947

-18 0.5002 -0.0251 3 3.9501 0.0700

-19 0.3331 -0.0134 2 3.7832 0.0475

-20 0.1623 -0.0074 1 3.6129 0.0530

Table 19: CAR of Symphony house bhd before & after acquisition announcement Market model &



0 -1.5356 0.0618 - - -

-1 -1.4591 0.0565 20 -2.9881 -0.0134

-2 -1.3810 0.0616 19 -2.9112 0.0078

-3 -1.3069 0.0464 18 -2.8408 0.0097

-4 -1.2362 0.0604 17 -2.7682 0.0089

-5 -1.1691 0.0787 16 -2.6930 -0.0086

-6 -1.0992 0.0687 15 -2.6212 0.0051

-7 -1.0318 0.0743 14 -2.5511 0.0075

-8 -0.9505 0.0631 13 -2.4752 0.0161

-9 -0.8779 0.0623 12 -2.4089 0.0229

-10 -0.8079 0.0771 11 -2.3428 0.0432

-11 -0.7351 0.0883 10 -2.2762 0.0364

-12 -0.6606 0.1091 9 -2.2004 0.0318

-13 -0.5855 0.1509 8 -2.1261 0.0291

-14 -0.5168 0.1433 7 -2.0480 0.0349

-15 -0.4416 0.1278 6 -1.9679 0.0381

-16 -0.3639 0.1092 5 -1.8994 0.0157

-17 -0.2867 0.1371 4 -1.8273 0.0155

-18 -0.2129 0.0349 3 -1.7590 0.0064

-19 -0.1456 0.0406 2 -1.6823 0.0008

-20 -0.0759 0.0177 1 -1.6103 0.0398


34/58

795





35/58

796




Table 20: CAR of chong motor holdings bhd before & after acquisition announcement Market model &

Market Adjusted Model Tan


0 5.2301 0.0812 - - -

-1 4.9802 0.0839 20 10.1696 0.1007

-2 4.7354 0.0793 19 9.9239 0.0859

-3 4.4868 0.0856 18 9.6796 0.0863

-4 4.2368 0.0830 17 9.4367 0.0731

-5 3.9802 0.0669 16 9.1904 0.0763

-6 3.7301 0.0582 15 8.9413 0.0779

-7 3.4777 0.0529 14 8.6893 0.1060

-8 3.2278 0.0497 13 8.4395 0.0916

-9 2.9757 0.0377 12 8.1877 0.0972

-10 2.7287 0.0362 11 7.9474 0.0915

-11 2.4834 0.0322 10 7.6999 0.0908

-12 2.2374 0.0293 9 7.4502 0.1044

-13 1.9875 0.0137 8 7.2030 0.0806

-14 1.7387 0.0269 7 6.9570 0.0776

-15 1.4910 0.0204 6 6.7115 0.0682

-16 1.2432 0.0078 5 6.4608 0.0722

-17 0.9968 -0.0008 4 6.2155 0.0683

-18 0.7443 0.0059 3 5.9722 0.0671

-19 0.4987 0.0023 2 5.7285 0.0609

-20 0.2530 -0.0073 1 5.4820 0.0699

. Table 21: CAR of Tradewinds corp bhd before & after acquisition announcement Market model &



0 0.2528 -0.0759 - - -

-1 0.2355 -0.0875 20 0.6552 0.1741

-2 0.2112 -0.0814th 19 0.6388 0.0604

-3 0.2026 -0.0825 18 0.6067 0.0082

-4 0.1966 -0.0848 17 0.6032 0.0289

-5 0.1841 -0.0698 16 0.5830 0.0084

-6 0.1716 -0.0837 15 0.5748 -0.0054

-7 0.1460 -0.0770 14 0.5324 -0.0438

-8 0.1459 -0.0677 13 0.5271 -0.0207

-9 0.1267 -0.0640 12 0.5071 -0.0430


36/58

797




-10 0.1021 -0.0872 11 0.4949 -0.0167

-11 0.1036 -0.0784 10 0.4858 -0.0306

-12 0.0818 -0.0882 9 0.4481 0.0068

-13 0.0881 -0.0675 8 0.3970 -0.0283

-14 0.0888 -0.0728 7 0.3982 0.0047

-15 0.0824 -0.0608 6 0.3708 -0.0279

-16 0.0759 -0.0354 5 0.3302 -0.0708

-17 0.0501 -0.0287 4 0.3127 -0.0540

-18 0.0475 -0.0058 3 0.2899 -0.0216

-19 0.0274 -0.0017 2 0.2780 -0.0348

-20 -0.0082 -0.0180 1 0.2655 -0.0481

Table 22: CAR of Wah seong corp bhd before & after acquisition announcement Market model &



0 0.4199 -0.0150 - - -

-1 0.3974 -0.0240 20 0.8288 0.0076

-2 0.3772 -0.0196 19 0.8107 0.0099

-3 0.3557 -0.0244 18 0.7915 0.0031

-4 0.3346 -0.0243 17 0.7753 0.0236

-5 0.3193 -0.0193 16 0.7536 0.0243

-6 0.3007 -0.0165 15 0.7317 0.0099

-7 0.2826 -0.0090 14 0.7103 0.0103

-8 0.2712 -0.0131 13 0.6936 0.0212

-9 0.2521 -0.0149 12 0.6673 0.0005

-10 0.2326 -0.0163 11 0.6376 0.0088

-11 0.2133 -0.0079 10 0.6195 0.0009

-12 0.1939 -0.0044 9 0.5956 0.0088

-13 0.1728 -0.0093 8 0.5768 -0.0089

-14 0.1523 -0.0048 7 0.5583 0.0041

-15 0.1271 0.0188 6 0.5405 0.0260

-16 0.1073 0.0127 5 0.5258 0.0200

-17 0.0877 0.0114 4 0.5078 -0.0032

-18 0.0636 0.0094 3 0.4896 -0.0059

-19 0.0433 0.0038 2 0.4713 -0.0136

-20 0.0248 0.0014 1 0.4467 -0.0101


37/58

798




Table 23: CAR of Atlan holdings bhd before & after acquisition announcement Market model & Market

Adjusted Model

Day Market Model Market Adjusted Model Day Market Mode

Documents

IMPACT OF ACQUISTION ANNOUNCEMANTS ON STOCK RETURN OF MALAYSIAN COMPANY