14. Impact of Open Offers on Shareholders’ Wealth

Corporate restructuring is essential for the sustainability and inorganic growth of corporations. Mergers, acquisitions, and takeovers are the prominent strategies, by which companies can restructure their businesses. The chapter focused on 31 large-sized takeover announcements (Open Offers) in India, during the period 2015–2017. The chapter includes only those open offers which have more than Rs. 100 crore payment considerations. For the investigation purpose, standardized event theory was used for the computation of CAARs during the event window of 61 days of selected 24 companies. The study found excessive abnormal returns during the post phase of announcements (0 to +30) as compared to pre-phase of event window (−30 to −1). Further, the findings showed consistent results with the results of prior studies mentioned in the literature. The chapter concluded that shareholders of the target companies can generate excessive returns by rigorously examining the open offer announcements. The chapter also supports the presence of semi-strong form of market efficiency in India.