Analyzing merger premiums and its implication on publicly listed acquiring banks' stock performance in the Philippine banking industry for the period 1996-2005: A real options approach
Date of Publication
2008
Document Type
Bachelor's Thesis
Degree Name
Bachelor of Science in Commerce Major in Management of Financial Institutions
Subject Categories
Finance and Financial Management
College
Ramon V. Del Rosario College of Business
Department/Unit
Financial Management
Thesis Adviser
Joseph James F. Lago
Defense Panel Member
Steven Lim
Christian Romagos
Kristine Tanjutco
Abstract/Summary
The proponents conducted a study on the analyis of premiums during bank mergers and acquisitions and its implication on publicly listed acquiring banks' stock performance in the Philippine banking industry using a real options approach (ROA). After gathering the necessary data from institutions affiliated with the banking sector which includes Bangko Sentral ng Pilipinas (BSP), Securities Exchange Commission (SEC), Philippine Stock Exchange (PSE) and Bloomberg, the proponents assessed if there occurs an issue of overpayment or underpayment in Philippine bank mergers and acquisitions (M&A's) by comparing the computed actual premium paid by the acquiring bank and the option premium derived using a real options approach. The results showed that majority of the merger deals included in the sample were overpaid dominated by the Bank of the Philippine Islands (BPI) and Equitable Bank (EB) as the acquirers. Conversely, Metropolitan Bank and Trust Company (MBTC) closed underpaid transactions with its acquisition of Solid Bank (SB) and Global Business Bank (GBB). Moreover, to see the implication of overpayment or underpayment on the acquiring banks's stock performance, the proponents compared the average abnormal returns of the acquirers before and after the merger duration by applying necessary statistical tools such as paired samples T-test and Wilcoxon signed-ranked test. The outcome of the study reveals that there is no significant difference in the values of the average abnormal returns of the acquiring banks, which consequently means that the issue of overpayment or underpayment has no implication on the acquiring banks' stock performance.
Abstract Format
html
Language
English
Format
Accession Number
TU21257
Shelf Location
Archives, The Learning Commons, 12F, Henry Sy Sr. Hall
Physical Description
166 leaves : illustrations
Keywords
Banks and banking--Philippines; Consolidation and merger of corporations--Philippines
Recommended Citation
Labog, E. S., Limvalencia, C. S., Pajarillo, M. C., & Tiutan, M. C. (2008). Analyzing merger premiums and its implication on publicly listed acquiring banks' stock performance in the Philippine banking industry for the period 1996-2005: A real options approach. Retrieved from https://animorepository.dlsu.edu.ph/etd_bachelors/18324