Capital gains taxation and shareholder wealth in takeovers

Bugeja, M; da Silva Rosa, R

Capital gains taxation and shareholder wealth in takeovers

Bugeja, M

da Silva Rosa, R

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Publication Type:: Journal Article
Citation:: Accounting and Finance, 2010, 50 (2), pp. 241 - 262
Issue Date:: 2010-06-01

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Field	Value	Language
dc.contributor.author	Bugeja, M https://orcid.org/0000-0002-1941-5092	en_US
dc.contributor.author	da Silva Rosa, R	en_US
dc.date.issued	2010-06-01	en_US
dc.identifier.citation	Accounting and Finance, 2010, 50 (2), pp. 241 - 262	en_US
dc.identifier.issn	0810-5391	en_US
dc.identifier.uri	http://hdl.handle.net/10453/13996
dc.description.abstract	Before December 1999, the capital gains of shareholders who sold their shares into Australian takeovers have been taxable irrespective of payment method. Subsequently, shareholders can elect to rollover capital gains in equity takeovers. We examine the effect of this change on the association between target shareholder capital gains and bidder and target firm shareholder wealth. The results indicate that prior to the regulatory change, cash consideration results in higher target shareholder returns for non-taxation reasons. After the introduction of capital gains tax rollover relief, we find that target and acquiring firm shareholders earn lower returns when cash consideration is offered to shareholders with greater capital gains. © The Authors. Journal compilation © 2009 AFAANZ.	en_US
dc.relation.ispartof	Accounting and Finance	en_US
dc.relation.isbasedon	10.1111/j.1467-629X.2009.00334.x	en_US
dc.subject.classification	Accounting	en_US
dc.title	Capital gains taxation and shareholder wealth in takeovers	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	50	en_US
utslib.for	150107 Taxation Accounting	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	open_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	50	en_US

Abstract:

Before December 1999, the capital gains of shareholders who sold their shares into Australian takeovers have been taxable irrespective of payment method. Subsequently, shareholders can elect to rollover capital gains in equity takeovers. We examine the effect of this change on the association between target shareholder capital gains and bidder and target firm shareholder wealth. The results indicate that prior to the regulatory change, cash consideration results in higher target shareholder returns for non-taxation reasons. After the introduction of capital gains tax rollover relief, we find that target and acquiring firm shareholders earn lower returns when cash consideration is offered to shareholders with greater capital gains. © The Authors. Journal compilation © 2009 AFAANZ.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/13996