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A Comparative Study: Cross Border and Domestic Mergers and Acquisitions on
Acquirers’ Shareholder Wealth Effects in Malaysia
LEONG YEN LEE
Faculty of Business and Accountancy University Malaya
June 2009
A Comparative Study: Cross Border and Domestic Mergers and Acquisitions on
Acquirers’ Shareholder Wealth Effects in Malaysia
LEONG YEN LEE Bachelor of Electrical and Electronic Engineering
University Tenaga Nasional Malaysia
2004
Submitted to the Graduate School of Business Faculty of Business and Accountancy University Malaya, in partial fulfilment Of the requirements for the Degree of
Master of Business Administration
June 2009
A Comparative Study: Cross Border and Domestic Mergers and
Acquisitions on Acquirers’ Shareholder Wealth Effects in Malaysia
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Abstract
In parallel with the global trends, cross border M&As have increased
dramatically in Asia Pacific economies since the mid 1990s. Take-over activities
were actively transacted by corporations to expand their business in order to tap
the opportunities posted in the fast growing market. The increasing investment
and trade liberalisation and deregulation in Asia encouraged cross border
activities. Malaysia accounted for 41 percent of the total deals and 38 percent of
the M&A transaction value of target firms in ASEAN from 1990 to 2000. The
cross border M&A activities would speed up corporate restructuring, gaining
market shares, business portfolio diversification and economic recovery during
economic downturn.
In the recent empirical show that cross border M&As perform even worst
than those within borders. On average, acquiring firm shareholders experience
significant wealth losses in domestic acquisitions, but not in international
acquisitions. The research objective of the study is to identify:
1) The cross border or domestic M&A attained a better return to the
acquirer’s shareholder wealth.
2) The determinants or factors that increase the return in acquirer’s
shareholder wealth in M&A activities.
In this study, the Market Model method is used to estimate the Beta of the
acquirers’ shareholder. The CAR method is used to measure the post merger
shareholders’ return. This research examines the magnitude and determinants of
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acquiring shareholder returns using 252 samples of domestic and foreign
acquisitions of Malaysia firms during the period 2004-2008 by running OLS on
the CAR with the determinants In this paper, estimation on the long term wealth
effects for a paired sample of acquiring and target firms base on the event
window of 60, 120 and 180 days after the announcement date.
The regression result shows that the cross border M&A in Malaysia
attained higher return to the acquirers’ wealth. The determinants of the direction
of merger, method of payment and firm size show an impact to the acquirers’
shareholders’ return. However, the market climate is insignificant to the CAR
which means there is no impact of the market climate towards the return.
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Acknowledgement
The writing of this dissertation has been one of the most significant
academic challenges I have ever had face. Without the support, patience and
guidance of my supervisor Dr. Edward Wong Sek Khin, this study would not have
been completed. Despite his may other academic and professional
commitments, his wisdom, knowledge and commitment to the highest standards
inspired and motivated me. It is to my supervisor that I owe my deepest gratitude.
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TABLE OF CONTENTS
PAGE Chapter 1 Introduction 1.1 Overview of Mergers & Acquistion 1 1.2 Research Problems 10 1.3 Research Objectives 13 1.4 Research Questions 13 1.5 Significant of Study 13 1.6 Scope of Study 14 1.7 Organization of the Report 15 1.8 Conclusion 16 Chapter 2 Literature Review 2.1 Overview of M&A 18 2.2 Motivations for M&As 20 2.2.1 Growth 20 2.2.2 Synergy 21 2.2.3 Diversifications 23 2.2.4 Market Power 24 2.2.5 Under-valuation/over-valuation Companies 25 2.2.6 Redistribution 25 2.2.7 Policy and Regulatory 26 2.3 Key Success Factors 27 2.3.1 Direction of Merger 27 2.3.1.1 Horizontal M&A 28 2.3.1.2 Vertical M&A 29 2.3.1.3 Conglomerate M&A 31 2.3.2 Method of Payment 32 2.3.3 Firm Size 35 2.3.4 Economic and Market Efficiency 36 2.4 Impact of Mergers and Acquisitions 37 2.5 Conclusion 39
Chapter 3 Hypothesis Development and Theoretical Framework
3.1 Research Framework 40
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3.2 Hyphothesis Development 42 3.2.1 Cross border and Domestic Acquisition 42 3.2.2 Direction of Merger 43 3.2.3 Method of Payment 44 3.2.4 Market Climate 45 3.2.5 Firm Size 46 3.3 Data Collection and Methodology 47 3.3.1Sample selection and data sources 47 3.3.2 Methodology 47 3.3.2.1 Market Model Method 47 3.3.2.2 CAR Method 49 3.3.2.3 Bauman’s Methodology 50 3.3.3 Data Analysis Techniques 51 3.4 Conclusion 52 Chapter 4 Empirical Results and Analysis 4.1 α and β coefficients computations under SPSS 53
4.2 Results of CARs computations individually for each Acquirer Company 55
4.3 Regression Results 55 4.3.1 Cross border and Domestic Acquisition 58 4.3.2 Direction of Merger 60 4.3.3 Method of Payment 62 4.3.4 Firm Size 64 4.3.5 Market Climate 65 4.4 Conclusion 67 Chapter 5 Summary and Conclusion 5.1 Overview of the Study 68 5.2 Summary of Research Results 70 5.2.1 A Review of Research Objectives 71 5.2.2 A Review of Research Questions 72
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5.3 Suggestions for Future Research 74 References 76 Appendix Appendix A 88 Appendix B 113 Appendix C 138 Appendix D 171 Appendix E 171 Appendix F 172 Appendix G 172
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List of Figures
Figure Title Page
1.1.1 An increase in deals between developed and developing countries. 5
1.1.2 China, India and Malaysia are at the forefront of M&A activity 6
1.1.3
South, East and South-East Asia: top 10 recipients of FDI inflows, 2006–2007 7
1.1.4
South, East and South-East Asia: cross-border M&As, by sector/industry, 2005–2007 8
1.1.5 Firms from both developed and developing countries target the same industries 9
1.2.1 Cross Border Merger and Acquisition Overview, 1990-2007 11
1.7.1 Organization of the Report 17
3.1.1 Research Framework 40
3.3.2.2.1 Event Window for CAR Evaluation 50
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List of Tables
Table Title Page
4.1.1 Regression Analysis Results for Proton Holdings Berhad 53
4.3.1 Regression Analysis Results for T+60 days Post Announcement Window 56
4.3.2 Regression Analysis Results for T+120 days Post Announcement Window 57
4.3.3 Regression Analysis Results for T+180 days Post Announcement Window 57
4.3.4 Regression Analysis Results for T+180 days Post Announcement Window without GDP Growth 58
4.3.5.1 Number of M&A Deals from Year 2004 to 2008 in Malaysia 66
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CHAPTER 1
Introduction
The introduction chapter comprised the background information on M&A
activities, the definition of the research problem and the purpose of the study.
This chapter also presents the significance and scope of the study is also
discussed. Finally, the organization of the report gives reader an overview
structure of the thesis.
1.1 Overview of Mergers and Acquisitions
Increased level of business combinations is a norm in a free open market.
The terms such as take-over, mergers, and acquisitions (M&A) mean business
combinations of acquired firm and acquirer (Ruhani & Pillay, 2000). Mergers and
acquisitions (M&As) are transaction where two or more companies are combined
to become one (Weston & Copeland, 1992). These activities represent massive
reallocation of resources within an economy. The objective is to channel the
corporate assets towards their best possible use. M&As are popular means
through which companies achieve economies of scale, remove inefficient
management or respond to economic shocks (Rachel, Armando, Kathleen and
Markus, 2004). International mergers and acquisitions are among the key
corporate strategies multinational corporations (MNCs) use to expand and
diversify. It also enables firms to grow in a short period in order to cope with the
rapid globalization of trade and services and competitive market forces (Larsen,
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2007). These popular forms of business investments gained popularity in the
business world with Malaysia being no exception since the 1990s (Ruhani &
Pillay, 2000).
The prime objective of a firm is to grow profitably. The growth can be
achieved either through the process of introducing or developing new products or
by expanding or enlarging the capacity of existing products. External growth can
be achieved by acquisition of existing business firm Ghosh and Das (2003). The
acquirers usually pursue a merger to cut costs, create growth opportunities,
gaining access to production and new technology. The acquirers will be able to
establish or broaden their presence in high-growth markets and also focus on
low-cost environments for manufacturing and sourcing. Well aware of the
growing threat from emerging rivals, they want to strengthen their competitive
positions. This strategy pushes expansion plans by broadening the customer
base and increasing market share. Core strengths such as technological
leadership and superior quality must be maintained despite the challenges posed
by emerging competitors. Companies can preserve these advantages by
launching new innovations targeted to meet specific market requirements. For
established firms, this means expanding the scope of their activities to assure
that existing intellectual property rights (IPRs) include features such as
proprietary solutions, pricing models and product upgrades. As emerging firms
acquire state-of-the-art products and technology, they are diminishing
established companies’ advantages in innovation and threatening their global
market superiority.
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The difference between domestic and cross border is that in a cross
border acquisition, the control of assets and operations is transferred from a local
to a foreign company and a mode of entry for foreign direct investors (FDI).
Cross border M&As are defined as any transactions in assets of two firms
belonging to two different economies. Cross border mergers and acquisitions
(M&As) are a main vehicle for foreign direct investment (Evenett, S.J., 2004)
Cross border M&As involve capital transfer that can increase the total investible
funds available to the host economies and may introduce innovative
management practices in the host economies (PECC, 2002).
In parallel with the global trends, cross border M&As have increased
dramatically in Asia Pacific economies especially since the mid 1990s. This wave
was driven by globalization, technological changes, and market deregulation and
liberalization. Almost all industries are going through reorganization and
consolidation. In 1998, APEC (Asia Pacific Economic Cooperation) attracted a
huge amount of capital inflow which contributed to economic growth and
economic recovery of the East and Southeast Asian economies from the
economy crisis in the late 1990s (PECC, 2002). In the 1990s, the economy of
Malaysia enjoyed a spectacular average growth of about eight percent per year
before the crisis (Malaysia, 1999). Take-over activities were actively transacted
by corporations to expand their business in order to tap the opportunities posted
in the fast growing market. Using the SDC Platinum of Thomson Financial
Securities data of Worldwide Mergers and Acquisitions Database, Malaysia
accounted for 41 percent of the total deals and 38 percent of the M&A
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transaction value of target firms in ASEAN from 1990 to 2000 (Metwalli and Tang,
2002).
Cross border M&As increase dramatically since the mid-1990s in Asia
Pacific developing economies, particularly in the five countries most affected by
the financial crisis including Indonesia, Malaysia, Philippines, Korea and
Thailand. Policy and regulations were amended expecting that the cross border
M&As would speed up corporate restructuring and economic recovery. The
increasing investment and trade liberalisation and deregulation in Asia
encouraged cross border activities. On M&A prospects in the Asia Pacific region,
the KPMG Global M&A Predictor (dated 21 January 2008) reported that outside
of the region’s mature markets, the majority of Asia Pacific’s national economies
are buoyant, enjoying a minimum of five percent GDP growth. Largely untapped
potential of regional and sector consolidation can therefore be expected to
continue to drive healthy corporate deal-flow, particularly in financial and
consumer services, and in industrials where several medium sized as well as
some mega-deals are expected to be done.
In the study of A.T. Kearney (2008) found that companies from developing
countries such as China, India, Malaysia, Russia, the United Arab Emirates and
South Africa are snapping up established firms at an astonishing rate. Refer to
Figure 1.1.1, of the 2,168 majority acquisitions between developed and
developing countries in 2007, almost 20 percent—a total of 421—were driven by
companies from developing countries. In Figure 1.1.2 Companies from India,
Malaysia and China accounted for 56 percent of the deals that took place from
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2002 to 2007. Malaysia is a surprising second—primarily due to the government
providing substantial tax incentives to engage in high-tech business deals and
promote exports.
Figure 1.1.1: An increase in deals between developed and developing
countries.
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Figure 1.1.2: China, India and Malaysia are at the forefront of M&A activity
Base on the UNCTAD, World Investment Report 2008, FDI flows to South-
East Asia increased by 18% in 2007, to $61 billion (Figure 1.1.3) – resulting in
yet another year of robust FDI growth there. Nearly all ASEAN countries received
higher inflows. Singapore, Thailand, Malaysia, Indonesia and Vietnam, in that
order, were the largest FDI recipients. While FDI growth in favourable regional
economic growth, an improved investment environment, higher intraregional
investments, and strengthened regional integration were key contributory factors.
Reinvested earnings were particularly strong, highlighting the importance of
existing investors as a source of FDI.
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Figure 1.1.3: South, East and South-East Asia: top 10 recipients of FDI
inflows, 2006–2007(Billions of dollars)
FDI inflows in 2007, as highlighted by M&A activities, rose in all three
sectors – primary, manufacturing and services. Cross-border M&A sales
contributed to the increase in FDI inflows to all three sectors (Figure 1.1.4).
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Figure 1.1.4: South, East and South-East Asia: cross-border M&As, by
sector/industry, 2005–2007 (Millions of dollars)
In consistent with the FDI in Figure 1.1.4, in the analysis of .T. Kearney
(2008) both developed and developing countries are targeting many of the same
industries. From Figure 1.1.5 the majority of deals (51 percent) are in mining,
consumer and retail, financial institutions, real estate, communications and
process industries. The targeted industries exhibit strong rates of growth, with
mining (41 percent) and real estate and construction (40 percent) at the forefront.
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Figure 1.1.5: Firms from both developed and developing countries target
the same industries
The rate of M&A activity between developing and developed countries is
growing by 19 percent per year. Consequently, established leaders should move
quickly and more broadly into emerging markets to curb up and coming
competitors. This can be achieved either by acquiring emerging firms or teaming
up with other incumbents to conquer developing markets jointly. For example,
when Vodafone purchased Hutchinson Essar in India last year, it secured its
position as a global market leader and gained a foothold in the fastest-growing
and second-biggest mobile market in the world, A.T. Kearney (2008). The
synergistic gains by M&A activity may accrue from more efficient management,
economies of scale and scope, improved production techniques, combination of
complementary resources, redeployment of assets to more profitable uses, the
exploitation of market power or any number of value enhancing mechanisms,
Bradley (1980).
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In the report of A.T. Kearney (2008) sovereign wealth funds (SWFs)—
state-owned investment funds that manage mainly foreign currency assets are
growing rapidly in number worldwide. Malaysia, both oil and exporting country
have gained huge current account surpluses in the last decades. Traditionally,
countries turned these surpluses into risk-averse financial assets to reduce
currency volatility and stabilize their economies by investing in importing
countries with a current account deficit. In the modern market, sovereign wealth
funds are favoring equity-type investments either through state-owned
investment funds or companies—thus gaining exposure to strategic companies
with more capabilities and know-how in industries that are crucial to their own
economies. The developing countries are expected to make a giant leap forward
in the acquisitions market once their funds reach the anticipated potential.
Although the SWFs will have a dramatic effect on financial markets, with the
rapid increase of their assets, these funds will under growing pressure to invest,
which may lead to overpaying for acquisition targets.
1.2 Research Problem
There has been a significant growth of worldwide M&A sales recently. This
can be documented in Figure 1.2.1, the total value of worldwide M&As sales in
2005 rose from US$929 billion to US$1637 billion in 2007. Malaysia accounted
for 0.28% of the world total value of cross border M&As sales and for 0.34% of
the world total value. Malaysia’s FDI outflow expanded from RM15.9 billion in
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2004 to RM38 billion last year. Petronas came in second in terms of total foreign
assets after Hong Kong’s Hutchison Whampoa Ltd, in a compilation of the top
100 non-financial transnational companies in developing countries. Other
Malaysian non-financial companies that made the list for having sizeable
investments abroad are YTL Corp Bhd, Genting Bhd, Telekom Malaysia Bhd,
Sime Darby Bhd and Maxis Communications Bhd. Asian M&A activities continue
to soar from last year to 2008 despite the US credit crisis and the weakness in
the Asian stock markets. According to Thomson Financial, total Asian mergers
and acquisitions (M&As) excluding Japan deals done last year were worth
USD310bil. The first quarter of 2008 recorded over USD70bil of deals completed
with over USD120bil of deals announced.
Figure 1.2.1: Cross Border Merger and Acquisition Overview, 1990-2007
A large shift of ownership of important enterprises from domestic to
foreign hands maybe seen as eroding national sovereignty and may reduce
competitions in domestic market and lead to market dominance of foreign
acquirers. Though M&As basically aim at enhancing the shareholders value or
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wealth, the results of several empirical studies reveal that on average, M&As
consistently benefit the target company shareholders but not the acquirer
company shareholders. Target company shareholders experience large,
abnormal positive returns, whereas buyer shareholders experience little sor no
positive abnormal returns (Doukas and Travlos, 1988; Eun, Kolodny and
Scheraga, 1996; Harris and Ravenscraft, 1991; Klaus, Mueller, Yortoglu, and
Zulehner, 2003; Kuipers, Miller and Patel, 2003; Seth, Song and Petit, 2000).
Recent empirical studies show that cross border M&As perform even worst than
those within borders, the fact that up to 83 percent of these transactions are
unsuccessful (Angwin and Savill, 1997; KPMG, 1999, Moeller and
Schlingemann, 2005). A study based on sample of 4430 cross border M&A by
US firm comparing the stock returns and operating performance are significantly
lower performance than the domestic transactions (Moeller and Schlingemann,
2005). An empirical evidence suggests that 61 percent of European executives
believed cross border M&As involve more obstacles, problems and risks than
domestic acquisitions and therefore were less likely not be successful (Angwin
and Savill, 1997).
Based on the empirical studies, companies employ M&A transactions
experience lower operating and stock performance and cross border M&A is
unlikely to be successful. However, this contradicts with the growing trends of
M&A transactions in Malaysia.
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1.3 Research Objectives
On average, acquiring firm shareholders experience significant wealth
losses in domestic acquisitions, but not in international acquisitions. It is
important to know the key success factors that causing the wealth gained in M&A
transactions. The research objective of the study is to identify:
1) The cross border or domestic M&A attained a better return to the
acquirer’s shareholder wealth.
2) The determinants or factors that increase the return in acquirer’s
shareholder wealth in M&A activities.
1.4 Research Questions
This study attempts to answer the following questions:
1) What are the key success factors of a successful M&A transaction?
2) Cross border or domestic M&As yield a better shareholders’ wealth?
3) What key factors determine the shareholders’ wealth effects in
M&A?
1.5 Significant of Study
There has been a significant amount of studies that examine the domestic
and cross border mergers and acquisition on shareholders’ wealth effect and the
determinants of a successful M&A transaction. However, most of the studies
were conducted in the Western countries such as United States of America,
United Kingdom and Europe countries and the studies are mainly focus on the
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effect of post merger factors on shareholder return. Most of the studies present
the post merger integration factors such as the corporate culture, the
communication plan between stakeholders, the functional integration and new
corporate culture. Thus, this study will give the academicians an extension of
knowledge about pre mergers strategy that will effects the acquirer’s
shareholders’ wealth in domestic and cross border M&A in Malaysia.
This study attempt to know the comparative result of domestic and cross
border M&A on acquirer’s shareholders wealth and also the factors that effect the
shareholder’s wealth. This study will highlight the important attributes for the
M&A planning process and help to crave a strategy to achieve a successful M&A
which increases the shareholders’ wealth.
1.6 Scope of study
This paper presents the wealth effects for acquire shareholders in term of
corporate share returns from cross border versus domestic transactions on the
performance of the public listed acquiring firms in Malaysia. Base on 252
samples, we will look into the determinants that have impact on the shareholders
wealth. In this paper, estimation on the wealth effects for a paired sample of
acquiring and target firms based on data from 1997 to 2007. The role of bid
characteristics and more target specific features in determining changes in
acquiring shareholders wealth will be examine as well.
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1.7 Organization of the report
This report consists of five chapters. It is organizes as below:
Chapter 1: The introduction chapter comprised the background information on
M&A activities, the definition of the research problem and the purpose of the
study. This chapter also presents the significance and scope of the study is also
discussed. Finally, the organization of the report gives reader an overview
structure of the thesis.
Chapter 2: The chapter explains about the M&A activities. The chapter starts with
the overview of mergers and acquisitions. The motivations of a company employ
M&A for the company expansion and development. It is then followed by a
discussion on the key success factors of increasing shareholders’ wealth through
M&A. Finally, the literature review discussed the impact of the M&A transactions
towards a company.
Chapter 3: This chapter presents the methodology employed in the study. The
chapter starts with the review of the research framework. Then it provides
discussed the hypothesis developed to assess the shareholders’ wealth effects in
this study and the data collection procedure will be discussed. Finally, the
methodology employed to measure the post merger shareholders return.
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Chapter 4: This chapter presents the empirical results and discuss all the findings
of this study. First of all, the results for the coefficients computations under the
software SPSS of individual beta will be shown. Then discuss about the results of
the individual Cumulative Abnormal Returns (CARs) of every M&A activity in the
sample.
Chapter 5: The final chapter presents the conclusion of this research. Firstly, an
overview of the study will be provided. Thereafter, the summary of the research
results and review of research objectives are discussed. Finally, the chapter ends
with suggestions for further research.
1.8 Conclusion
This chapter discussed the introduction of the study. The introduction
presented the research problem, research objectives, research questions,
significant of study and scope of study. Lastly, organization of the report is
included. In the following Chapter, the literature review related to M&A will be
presented.
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Figure 1.7.1: Organization of the Report
Chapter 1
Introduction
1.1 Overview of Mergers & Acquisitions
1.2 Research Problem 1.3 Research Objectives 1.4 Research Questions 1.5 Significant of Study 1.6 Scope of Study 1.7 Organization of the Report 1.8 Conclusion
Chapter 2
Literature Review
Chapter 3
Hypothesis Development and
Theoretical Framework
Chapter 4
Empirical Results and Analysis
Chapter 5
Summary and Conclusion
2.1 Overview of M&A 2.2 Motivations of M&A 2.3 Key Success Factors 2.4 Impact of M&A 2.5 Conclusion
3.1 Research Framework 3.2 Hypothesis Development 3.3 Data Collection and
Methodology 3.4 Conclusion
4.1 α and β coefficients computations under SPSS
4.2 Results of CARs Computations Individually for Each Acquirer Company
4.3 Regression Results 4.4 Conclusion
5.1 Overview of the study 5.2 Summary of the Research
Results 5.3 Suggestions for Future Research
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CHAPTER 2
Literature Review
In chapter 2, the literature review explains about the M&A activities. The
chapter starts with the overview of mergers and acquisitions. The motivations of
a company employ M&A for the company expansion and development. It is then
followed by a discussion on the key success factors of increasing shareholders’
wealth through M&A. Finally, the literature review discussed the impact of the
M&A transactions towards a company.
2.1 Overview of M&A
A merger or acquisition is a transaction where two or more companies are
combined to become one (Weston & Copeland, 2002). Merger, the assets and
operations of two firms are combined to establish a new legal entity (PECC,
2002). There are two forms of merger, merger by absorption and merger by
establishment. A merger by absorption is the act by means of which one or more
companies limited by shares (absorbed), which are dissolved without liquidation,
transfer to another existing company limited by shares (absorbing) the entirety of
their property (assets and liabilities) (Panagiotis, 2003). Merger by establishment
is when two or more companies merged into a newly created company (PECC,
2002).
Acquisition is where the control of assets and operations is transferred
from the target company to the acquired company. The term acquisition means
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essentially the same as merger, but is usually reserved for conglomerates buying
other corporations (Panagiotis, 2003). Acquisition can be taken in two forms,
asset acquisition and share acquisition. Asset acquisition when the acquiring
company purchases part or all the assets of the target which will remain legally in
existence after the transaction. Share acquisition occurs when the acquiring firm
company buys shares in the target company from individual shareholders
(PECC, 2002).
Cross border mergers and acquisitions (M&As) are a main vehicle for
foreign direct investment (Barba Navaretti and Venables, 2004. Yet despite its
quantitative importance, the determinants of cross-border M&As are still not well-
understood. Following Neary (2007) various motives for M&As can be
distinguished in general. There are two basic motives stand out: an efficiency
motive and a strategic motive. Efficiency gains arise because M&As increase
synergy between firms through increased use of economies of scale or scope.
Furthermore, from a strategic perspective M&As might change the market
structure and as such have an impact on firm profits, which might even be
reduced to zero (Salant et al., 1983).
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2.2 Motivations for M&A
2.2.1 Growth
Nowadays, business systems are undergoing a dramatic transformation in
response to the continual changes that have become the only constant in the
business environment and companies are constantly adapting to these changes.
M&A is one of the most important means by which companies respond to
changing conditions (Bruner, 2004). A company involves in two form of growth,
internally and externally. Internal growth can be slow and ineffective if a firm is
seeking opportunity in short-term advantage over its competitors (Patrick A.
Gaughman, 2001). Mergers and acquisitions as a source of growth in order to
reach strategic and financial advantages are becoming increasingly an
instrument of macroeconomic renewal (Bruner, 2004). A firm that is seeking to
grow aggressively will often view acquisitions and internal growth as
complementary strategies (Hay and Liu, 1998).
M&As is the fastest way for a firm to expand its production, market,
strategic (intangible) assets and achieving the competitive goal. M&As allow a
latecomer in an industry to attain new technology and catch up rapidly (PECC,
2000). M&As with an existing company involve less cost for growth. The
acquisition of targets with good growth prospects but limited cash by companies
with plenty of financial slack but limited investment opportunities may be value-
enhancing Myers and Majluf (1984). Even though bidding firms will pay a
premium to acquire resources through mergers, this total cost is not necessarily
more expensive than internal growth (Patrick A. Gaughman, 2002).
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2.2.2 Synergy
Synergy benefits refer to the ability of a corporate combination to be more
profitable than the individual firms that are combining (Patrick A. Gaughman,
2001). Synergy is the enhanced competitive capacity and attained greater
cashflows in excess of what an individual company will gain (Sirower, 1997). A
study concluded that in a post merger phase, there are significant improvements
in the cashflows compared to the competitors in the same industry (Healy, Peapu
& Ruback, 1992). The combination of two firms will yield a more valuable entity
than the value of the sum of the two firms if they were to stay independent:
Value (A + B) > Value (A) + Value (B)
Synergy can be derived from cost economies which two companies will eliminate
the duplicated cost factors which in turn lower the per-unit cost. Due to the
pooling of management resources, sharing marketing and distribution networks,
purchasing synergies production cost reductions and duplication of production
(PECC, 2000). Synergy can be derived from revenue enhancement in which
combination of different capability of the two companies to increase the revenue
(Patrick A. Gaughman, 2001).
The matching of complementary resources and skills to enhance firm’s
innovatory capabilities in long term positive effects on sales, market shares and
profits (PECC, 2000). For example, one company’s capability, such as research
prowess, is combined with another company’s capability, such as marketing
skills, to significantly increase the combined revenues. Efficiency gains arise
because M&As increase synergy between firms through increased use of
22
economies of scale or scope. A merger is worthwhile when the synergy (surplus
value) exceeds the incurred merger costs including the takeover premium
(Sirower, 1997). If synergy exists, M&As make economic sense if the whole is
worth more than the sum of its parts (Ruud, Vincent and Huib, 2000).
There are three types of synergy benefits: operating, financial and
managerial synergies (Trautwein, 1990). Operating synergy assumes that
economies of scale exist in an industry and that prior to their M&A, firms are
operating at levels of activity that fall short of achieving the potential for
economies of scale (Weston et al., 2001). Expansion through a merger or
acquisition increases the size of the company and hence may lower per-unit
costs. Financial synergy refers to the impact of a merger or acquisition on the
combined firm’s cost of capital. This can be achieved by lowering the systematic
risk of the firm’s investment portfolio. Alternatively, increasing firm size may
improve company access to cheaper financing and/or create an internal market
where capital can be allocated more efficiently. Finally, managerial synergies
may arise from combining firms of unequal managerial capabilities (Luypert and
Huyghebaert, 2006).
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2.2.3 Diversifications
Most of the companies are risk averse which trying to lower their risk and
exposure to certain volatile industry segments by adding other sectors to their
business portfolios (Patrick A. Gaughman, 2001). Firms may make cross border
M&As on the basis that industry returns across economies maybe less correlated
than within an economy (Vasconcellos and Kish, 1998). Geographical
diversification may serve to enhance acquirers returns especially for those
without a prior presence in the target’s country as it opens up a whole new
market and network for them, (Fatemi and Furtado, 1988; Corhay & Rad, 2000;
Kiymaz &Mukherjee, 2000).As intensified global competition and rapid
technology development have led firms to focus on their core activities, the need
for product diversification has become less important (Morck and Yeung, 1999).
Research studies show that unrelated diversifications tend to yield poor results,
related diversifications, mergers, and acquisitions into a field that is close to the
acquiring firm’s main line of business tend to have better performance (Berger
and Ofek, 1995). Research tells us that staying with what a company knows best
may yield positive results, but straying into businesses that it does not know is an
uphill battle that only a select few companies can manage successfully (Patrick
A. Gaughman, 2001).
24
2.2.4 Market Power
Some mergers may result in market power which redounds to the benefit
of the merging firms. George Stigler (1950) argued that such an effect might
have been a primary motivation for many of the mergers and acquisitions during
the last quarter of the nineteenth century and the first half of the 20th century. He
called the 1887-1904 merger wave "mergers for monopoly" and the 1916-1929
wave "mergers for oligopoly." Regardless of whether market power was, or was
not, a major motivation for mergers in the first-half of the century it is doubtful that
the bulk of more recent merger activity could be attributed to an effort to secure
market power. There seems to be a number of reasons given to merge/acquire a
company, many of which involving the market is to acquire more efficient
distribution, to strengthen the company’s position towards its distributors, to
strengthen the market position, to acquire attractive resources and/or brand
names (both of which in turn to attract customers) and to achieve market power,
Öberg & Anderson, (2002). The market power as well as efficiency and
effectiveness are seen as ways of creating values following a horizontal
acquisition. An acquisition could be a means to get hold on new marketing
resources, or to redeploy the acquiring firms marketing resources. Brands, sales
forces and general marketing expertise all could be viewed as assets possible to
redeploy, Capron & Hulland (1999). In highly concentrated industries, firms tend
to recognize the impact of their actions and policies on one another. This may
25
influence firm reactions to changes in competitive behaviour, like price reductions,
and possibly result in tacit collusion (Weston et al., 2001).
2.2.5 Under-valuation/over-valuation Companies
If stock prices are sufficiently depressed, the takeover of a listed company
may constitute a bargain relative to investing in new facilities from scratch (Golbe
and White, 1988). Managers are more likely to issue new shares when their
company is over-valued (Myers and Majluf, 1984). A research on the behaviour
of acquiring mangers concluded that managers in overvalued firms have an
incentive to engage in stock acquisitions (Sheilfer and Vishny, 2003). Target
shareholders will accept these stock offers because they tend to overestimate
the value of synergy benefits in overvalued market (Rhodes-Kropf and
Viswanathan, 2004). Imperfections in the capital market and major exchange rate
rearrangements may provide short-term capital gains through acquiring an
undervalued firm. This is a drive in cross border M&As as those host economies
have poorly developed capital markets or in financial crisis (PECC, 2000).
2.2.6 Redistribution
A person with a strongly developed power motive strives to experience the
opportunity to exert control over others or to experience control itself and aims at
increasing their source of power (Schmalt, 1987). The agency theory states that
the interests of the shareholders or owners are not parallel to the interests of
management (Ruud, Vincent and Huib, 2000). A reason for M&A maybe ‘Empire
26
Building’, where manager strive to expand the size of the company (Mueller,
1989).
In the other hand, the hubris theory states that management strives for
synergy having the goal to maximize profits for shareholders (Ruud, Vincent and
Huib, 2000). Synergies occurred in these mergers but the pre-calculation of the
synergy is too high to justify (Roll, 1986).
The game theory where the moment a competitor decides to merge, one
has to decide whether to counter the attack on the current market position by
similar move. The management does not know the driving forces of the
competitors M&A activities and whether this decision was financially sensible
(Ruud, Vincent and Huib, 2000). A company will make the move that minimizes
regret. “It is better for reputation to fail conventionally than succeed
unconventionally” (Keynes 1936). Due to fierce competition in M&As and limited
time for preparation, the strategic trajectory of synergies is shorten causing lower
chance of success (Roll, 1986).
2.2.7 Policy and Regulatory
Industry deregulations drive the M&A activity across industries (Mitchell
and Mulherin, 1996; Mulherin and Boone, 2000; Andrade et al.). In cross border
M&AS, most economies are trying to attract FDI, not only by removing
restrictions but also trhoguh active promotion and by providing high standards of
treatment, legal protection and guarantees. The international regulatory
framework has been strengthened such as bilateral investement protection and
27
double taxation treaties such as WTO’s Trade Related Investment Measures
(TRIMS) Agreement and the General Agreement on Trade in Services (GATS)
(PECC, 2000). However, the governments may reserve the right to approve
some proposed investment projects and reject or modify others to preserve
particular public interests (APECC, 1999).
2.3 Key Success Factors
2.3.1 Direction of Merger
The M&As relationship between the acquiring and target firms can be
categorized as horizontal, vertical and conglomerate. Horizontal mergers are
those involving companies in the same market segment (for example, two retail
banks merging). Vertical mergers involve companies at different stages of the
production process in a given market (for example, an electricity generator
merging with an electricity-distribution company). The horizontal, vertical and
conglomerate mergers may cause different competitive problems. By reducing
the number of competitors in a market, horizontal mergers may create or
strengthen market power. Non-horizontal mergers are generally less likely to
engender competition concerns than horizontal mergers because they do not
result in the loss of direct competition between merging firms in the same
relevant market (Neven, D. and Albaek, S., 2008).The threats to competition from
vertical and conglomerate mergers are less obvious, and can in principle be
viewed as unilateral actions with the potential to harm rivals.
28
2.3.1.1 Horizontal M&A
Horizontal M&As deals in which competitors are combined (Patrick A.
Gaughan, 2001). The 1998 $77.2 billion merger between Exxon and Mobil is an
example of a successful horizontal deal. Horizontal mergers benefits in
economies scale of production and distribution, access to new markets, removal
of inefficient management, greater financial possibilities and combined intangible
assets such as trademarks, patents and license (Rauud, Vincent, Huib, 2000).
Horizontal mergers tend to be motivated by the drive for economies of scale:
spreading fixed costs (such as information technology or marketing) across a
larger output, (Jenkinson, 1999). The horizontal mergers create market power
(Eckbo and Stillman, 1983). In any case, large horizontal mergers tend to attract
the attention of competition authorities that would be expected to block such
deals if effective competition was seriously reduced significant barrier to entry.
For entry to be considered a sufficient competitive constraint on the merging
parties, it must be shown that entry is likely to occur if prices move above
competitive levels. This depends substantially on the associated sunk costs of
market entry. Entry may be constrained by barriers such as technical advantages
or the experience and reputation of a firm. Moreover, entry would be more likely
to occur in a market that is expected to grow (Commission of the European
Communities, 2004). A horizontal merger may also limit competition in a relevant
market by removing one of the merging parties as a potential entrant into that
relevant market. Potential market entry may also constrain the behaviour of the
merging parties (Pilsbury and Meany, 2009).
29
2.3.1.2 Vertical M&A
Vertical M&As occurs between firms in client-supplier or buyer-seller
relationship (PECC2002). In 1993, $6.6 billion merger between Merck, a
pharmaceutical manufacturer and Medco, a pharmaceutical distributor as the
vertical transaction (Patrick A. Gaughan, 2001). Vertical mergers describe a
situation where firms operating at different levels in the supply chain merge
(Jenkinson, 1999).Vertical mergers attained shorter industrial chain, procurement
cost reduction, more efficient communication and focus on market development
(Rauud, Vincent, Huib, 2000). Vertical mergers are often justified on the grounds
of internalizing contracting problems, and when the upstream market is less than
fully competitive such mergers can result in both higher profits and lower prices.
However, vertical mergers can produce situations of "complex monopoly" where
vertical integration acts as a significant barrier to entry (Jenkinson, 1999). In term
of market power, the greater the market power at one level of the supply chain,
the more attention should be devoted to vertical issues. The threat of switching to
alternative firms would limit the ability of a vertically merged firm to increase
prices or reduce the level of service quality. In the absence of competing
upstream competitors, vertical effects might lead to foreclosure of all downstream
rivals and monopoly prices (Motta, 2004). An upstream monopolist may not want
to set higher prices for its downstream competitors due to the double
marginalisation problem. The monopolist could extract all its revenue at the
upstream level without leveraging its market power into the downstream level
(Pilsbury and Meany, 2009). Another issue raised in competitive assessments is
30
to what extent the merged parties have the incentive and ability to foreclose third
parties from entering the market. A vertically integrated firm may raise its rivals’
costs by supplying the inputs at higher prices to its competitors than to its own
downstream units (Pilsbury and Meany, 2009). The assessment of buyer power
would establish whether competitors at the downstream market have sufficient
bargaining power to constrain the ability of the merging party operating at the
upstream level to increase prices, deny access or reduce service quality
(Pilsbury and Meany, 2009). The most common benefit of vertical integration is
that companies may create a more cost efficient organisation. For example, such
benefits may arise from technological economies, (the integration of
technological processes, such as the integration of iron- and steelmaking).
Another benefit could be the lowering of transaction costs, the main source of
which are the costs involved in bringing buyers and sellers together (Harrington,
J.E. Jr. and Vernon, 2005). By aligning the incentives of firms operating at
different levels of the supply chain, vertical mergers may also reduce the double-
marginalisation problem, which describes a situation where every firm in the
supply chain wants to maximise its profits. When the supplier or retailer has a
certain degree of market power, it would set its prices above marginal costs.
Without vertical integration, the price of the input would therefore be marked up
twice: by both the upstream and downstream firms. Vertical integration allows a
firm to control for the problem by internalising the profits made at other levels of
the supply chain. When two firms are managed by the same company, the end-
31
user price may be lower, as this price would be chosen so as to maximise profits
for the whole entity (Pilsbury and Meany, 2009).
2.3.1.3 Conglomerate M&A
A merger may be of a conglomerate nature when the involved firms are
not operating in the same market and are not in a buyer–seller relationship. Such
mergers are neither horizontal nor vertical (Pilsbury and Meany, 2009).
Conglomerate mergers involve companies in distinct markets. Companies
acquire firms that are in totally different industries known as conglomerate
mergers. Daimler Benz’s acquisitions in sectors such as the aerospace industry
help convert the premium automobile manufacturer into a conglomerate and
Europe’s largest industrial company (Patrick A. Gaughqn, 2001). Typically, a
diversified firm is defined as one that has sales in two or more market segments
(according to two-digit SIC codes) along with a requirement that the most
important segment does not account for more than a particular proportion (often
90%) of total sales.The target company in conglomerate M&As seek to diversify
risk and attain economy scope (PECC, 2000). The results from these studies are
quite clear: diversified companies tend to be valued less highly than focused
companies. An example of the results obtained by such studies is found in Lins
and Serveas, who use data for publicly traded firms from the U.K., Germany and
Japan for the period 1994-96 (excluding financial businesses). They find that
international differences in the institutional environment of firms have an effect on
the value of diversification. The evidence for Japan and the U.K. points to
32
diversification discounts of approximately 10-15% (measured in terms of market
value to sales ratios) while in Germany the effect is neutral for the whole sample
but significant for firms where insider ownership is under 5% (these are typically
larger firms) (Jenkinson, 1999). A study on Berger and Ofek10study the 1980s
boom in diversification activity in the U.S. and find diversification discounts of
around 14%. In the study at cross-subsidies, over-investment (due to easier
availability of large cash flows) and informational asymmetries with divisional
managers as the possible causes (Berger and Ofek, 1995). Some benefits from
diversification are also identified, although the most important, by some margin,
appears to be possible tax benefits. The value loss associated with diversification
generates large profit opportunities for outsiders. Hence, there have been a
number of studies of spin-offs, equity carve-outs and other ways of increasing
corporate "focus" and efficiency. The results tend to suggest (see, for example,
Berger and Ofek11) that firms with the lowest valuations (relative to comparable
undiversified firms) are more likely to be taken over and broken up, and that such
transactions can yield good returns for those that break up the firms (Berger and
Ofek, 1995).
2.3.2 Method of Payment
In the study of Loughran and Vijh (1997), measure how well companies
that had merged performed relative to comparable companies (matched by size
and market-to-book ratios) that had not merged. Their focus is on 5-year holding
periods after the merger. Interestingly, the post-acquisition returns are found to
33
be related to both the mode of acquisition and the form of payment. Mergers
under-perform matching companies by 16% over 5-year horizons, while hostile
tender offers outperform comparable firms by 43%. Similarly, companies that pay
for acquisitions using their own shares under-perform by 24%, whilst cash
bidders out-perform by around 19%. The asymmetry information models which
allow to explain the choice of the payment method in mergers and acquisitions
have been initially developed by Hansen (1987) and by Fishman (1989) and are
based on Myers and Maljuf’s work (1984) explained that both the target and the
bidder have private information on their own value. According to these
informational models, the abnormal returns are significantly negative when the
operation is financed with stocks but do not show that the performance of the
investment is low, since the choice of the payment method reveals private
information of the bidder concerning the value or the synergies of both firms.
According to Ross (1977), managers who can have an informational
advantage are incited to signal their private information through the choice of
their debt level. For firms that have low cash flows, it is costly to have high debt
levels, because the probability of bankruptcy is higher than for firms whose cash
flows are high. In Leland and Pyle (1977), under certain conditions, managers of
valuable firms signal their quality by retaining a large stake in the firm and so will
use more debt than managers of firm of low value. Debt financing allows the
manager to retain a large part of the ownership of the firm, but holding a large
stake in the firm is costly for risk adverse managers. This large stake is less
costly to a manager of a high quality firm than to a manager of a low quality firm,
34
and therefore the proportion of stocks held by insiders is a signal concerning the
firm’s quality. The question of the capital structure is also bound to the
phenomena of signals. As Blazenko (1987) shows, high quality projects are
signalled by the use of debt or cash. Indeed, risk adverse managers will not use
cash if they are compelled to issue debt in order to obtain cash, unless they are
sure that the quality of the stocks to be acquired justifies the personal risk of
loosing their job. In other words, since managers are not in favour of the use of
cash as a payment method, the fact that they use it nevertheless can be a signal
concerning the potential of the stocks that will be acquired.
Myers and Maljuf (1984) show that, in a world of asymmetry information,
the choice of the payment method by the bidding firms in acquisitions can reveal
information concerning the bidder. The managers who own information and want
to act in the interest of their actual shareholders will use stocks if they are
overvalued. They will put some positive net present value investments aside if
the stocks that would be used to finance the operation are undervalued by the
market. So, the decision to finance an investment by stocks will be interpreted by
the market as bad news, so that the stock price of the firm will decrease at the
announcement of the acquisition. Moreover, investors are incited to decrease
their valuation of a stock offer, for fear of acquiring overvalued stocks.
Conversely, when a cash offer is announced, the assets of the bidder will be
considered as being undervalued, which constitutes a positive signal for
investors.
35
So the more the financing is risky, the more the effect on the stocks will be
negative, that is why managers use first internal financings, then debt and finally
they issue stocks (Myers, 1984). In accordance with this hypothesis, Nayar and
Switzer (1998) show that the more the debt used in the acquisition is risky, the
less the effects for the bidder’s shareholders will be favorable.
2.3.3 Firm Size
Large firms are better positioned to serve multi-establishment clients
(Public Accounting Report, 1994; Spurr, 1987) and also get premium fees
(Barefield, Gaver and O'Keefe, 1993; Firth, 1993; Francis and Simon, 1987).
Large firms may be better able to realize efficiencies from, for example, the
internalisation of talent or technologies from a target firm because they can apply
these assets on a sufficiently large scale. Large firms often have the financial
resources needed to acquire other companies. Hence, combining with a
financially constrained target may create an internal capital market, where capital
is available at lower costs (Luypert and Huyghebaert, 2006). Furthermore, larger
firms command more resources, enjoy superior economies of scope and scale,
and should therefore face a better post-acquisition process. Through growth,
they signal success and accumulation of goodwill. Firm size is significantly
positively related to the decision to engage in a merger or acquisition (Luypert
and Huyghebaert, 2006). Eckbo and Thorburn (2000) suggest that the gains
obtained are highly diluted when the size of the acquiring firm is relatively large
compared to the target firm.
36
Lambrecht (2004) derives the size and hysteresis effects in the presence
of economies of scale. The fact that after a merger, there are fewer small and
large firms in the industry and a huge merged entity emerges. Hence, both the
market structure and the competitive landscape of the industry change. In
addition, the huge merged firm combines the assets of the two merging firms,
thereby reducing production costs. The percentage gain differs for a small and a
large merging firm as it depends the firm’s size and its relative contribution to the
merger benefits.
2.3.4 Economic and Market Efficiency
The desire for firm growth through M&A might be caused by bad business
conditions. There is a positive relationship between GDP and M&A activity
(Steiner, 1975 and Guerard, 1989). Other studies have found a negative relation
between GDP growth and M&A activity (Beckenstein, 1979 and Becketti, 1986).
The study on relation between industrial production, business failures, stock
prices, interest rates and M&A activity in the USA between 1947 and 1977 shows
that a weakly positive relation between economic conditions and M&As
(Melicher, 1983).
The role of the exchange rates has been well documented in the
international literature with acquirers said to gain the stronger their currency vis a
vis their target resulting in lower financing costs for them, (Froot & Stein, 1991,
Kang, 1993; Markides & Ittner, 1994; Conn et al., 2005). Alternatively acquirers
37
may lose as the stronger their currency, the value of future repatriated profits will
be lower (Cakici, 1996).
The yield spread between corporate and government bonds and the term
spread between the yield on long term government bonds and the yield on
Treasury will influence the financing and investment decisions. The higher the
yield spread, the more expensive it will be for a firm to borrow money. Relatively
high yields on long term bonds can be attributed to expectations of future
increases of interest rate (Luypert and Huyghebaert, 2006).
2.4 Impact of M&A
In the finance literature, corporate performance is measured by comparing
the returns earned by an acquiring firm compared to some risk adjusted
benchmark portfolio returns (Cooper and Gregory, 2000). M&A do not add value
to the acquiring firm and will detrimental to shareholder wealth in long term
(Carper, 1990). In management literature, there are three main determinants of
M&A on a corporate performance which are the strategic fit, process literature
and organizational fit (Schoenberg, 2000). The stream of literature has its origins
in the human resource, organizational behaviour and strategic management
disciplines (PECC, 2000). Poor management of the strategic fit, the process or
the organizational fit account for many M&A failures (Cooper and Gregory, 2000).
The finance and management literature in most M&A deals have a negative
impact on corporate performance in term of acquiring firm’s share prices and
profitability (Jensen and Ruback, 1983; Ravenscraft and Scherer, 1987;
38
Magenheim and Mueller, 1988; Mueller, 1996; Sirower, 1997; Bild, 1998; Markids
and Oyon, 1998; Schenk, 2000).
The poor corporate performance of the acquiring firms after M&As maybe
be due to incompatible culture, inability to manage targets, inability to implement
change, clash of management style and incompatible marketing system
(Schmidt, 1999). Poor strategic rationale, hubris of acquirer manager leading to
excessive premium, faulty financial evaluation might also contribute to M&A
failure (Sudarsanam, 2000). However, there are studies found that the target firm
shareholders experience signification positive returns from M&As (Datta, Pinches
and Narayanan, 1992; Jensen and Ruback, 1983; Lubatkin, Srinivasan and
Merchant, 1997; Schweiger and Goulet, 2000).
There are studies found that M&As have a positive impact on the
productivity of the acquired firms (Lichtenberg and Siegel, 1987; Lichtenberg,
1992). Comparing with both the industry average and with the acquired firms in
domestic takeovers, foreign acquisitions developed more favourably in terms of
productivity, employment and market shares. Acquired firms reported stronger
organizational and technological improvements (PECC, 2000).
Cross border M&As bring foreign financial resources to a host economy,
the inflows become and investible resources in the hands of local owners. Under
economic or financial crisis, firms are usually undervalued against their long term
value; foreign investors can acquire local firms at cheap prices. M&As during
financial crisis is that excessive exchange rate depreciation, forced domestic
firms to sell assets to pay off short term debts. Foreign firms had enough liquidity
39
purchased the domestics firms (PECC, 2000). The possibility of undervaluation
increase if the negotiating position of the host economy is weak or the hose
economy does not make potential investors compete through bidding (Samonis,
2000). M&A will increase market concentration and simulates and improves
efficiency and the employment rate as new production capacity is created.
2.5 Conclusion
In this chapter, the literature review presented an overview of M&A. The
motivation of M&A discussed the factors which are company growth, synergy,
diversifications, market power, undervalued or overvalued companies,
redistribution and policy and regulatory that encourages companies to employ
M&A. This chapter also presented the pre merger key success factors of M&A
which are the direction of merger, method of payment, firm size and economic
and market efficiency that later developed the research framework and as the
hypothesis in Chapter 3. The chapter ended with a discussion on the impact of
M&A to the firm and the shareholders.
40
CHAPTER 3
Hypothesis Development and Theoretical Framework
This chapter presents the methodology employed in the study. The
chapter starts with the review of the research framework. Then it provides
discussed the hypothesis developed to assess the shareholders’ wealth effects in
this study and the data collection procedure will be discussed. Finally, the
methodology employed to measure the post merger shareholders return.
3.1 Research Framework
Based on the literature review presented in chapter 2, a framework has
been developed to investigate the relationship among cross border and domestic
M&A, M&A key success factors and acquirer’s shareholder wealth (refer figure
3.1.1).
Figure 3.1.1: Research Framework
Shareholder Wealth
Type of M&A • Cross Border • Domestic
Direction of Mergers • Horizontal • Vertical/Conglomerate
Method of Payment • Cash • Stock • Cash & Stock
Market Climate
Firm Size
41
A regression analysis is used to identify the interaction effects between
the type of M&A and shareholder wealth. The analysis will also examine the
relationships between the key success factors and shareholder wealth.
Y = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5
Where Y = Shareholder Wealth
X1 = International or Domestic Mergers
X2 = Direction of Mergers
X3 = Method of Payment
X4 = Firm Size
X5 = Market Climate
Independent Variables:
• Type of M&A
• Direcetion of Mergers
• Method of Payment
• Firm Size
• Market Climate
Dependent Variables:
• Shareholder Wealth
Based on the above discussion, the following hypotheses are formulated:
H1: The returns to cross border acquisition exceed the returns to domestic
acquirer.
42
H2: Horizontal mergers attained better performance than vertical and
conglomerate mergers.
H3: Payment in cash has an effect on the returns of the acquisition.
H4: GDP growth has a negative effect on the returns of the acquisition.
H5: Firm size has an impact on the shareholders wealth in M&A activites.
3.2 Hypothesis Development
3.2.1 Cross border and Domestic Acquisition
Returns to acquirers in foreign markets may vary to those generated in the
domestic market due to the benefits/costs of geographical diversification that
arises from cross border deals. Cross border mergers enables the firms to
expand its boundary (Connet al., 2005). If this form of diversification is of value to
acquiring firms we would expect their announcement returns to exceed those of
domestic acquirers, lending support for the multinational network theory. Recent
empirical studies show that cross border M&As perform even worst than those
within borders, the fact that up to 83 percent of these transactions are
unsuccessful (Angwin and Savill, 1997; KPMG, 1999, Moeller and Schlingemann,
2005). A study based on sample of 4430 cross border M&A by US firm
comparing the stock returns and operating performance are significantly lower
performance than the domestic transactions (Moeller and Schlingemann, 2005).
An empirical evidence suggests that 61 percent of European executives believed
cross border M&As involve more obstacles, problems and risks than domestic
acquisitions and therefore were less likely not be successful (Angwin and Savill,
43
1997). However, in the study of Chakrabarti, Jayaraman and Mukherjee, 2006
shows that M&A deals involving culturally distant firms perform better in the long
run. This result can be interpreted as indicating the role of cultural distance as a
source of value to the firms or due to stricter selection criteria applied in choosing
target firms from culturally distant countries.
H0: The returns to cross border acquisition less than the returns to domestic
acquirer.
HA: The returns to cross border acquisition exceed the returns to domestic
acquirer.
3.2.2 Direction of Merger
A positive market reaction is expected to the horizontal M&As due to
apparent possibilities of synergies. The synergies steams from managerial and
operational improvements (Erikson, Hogfeldt en Spens, 1998). The market
theory (De Jong, 1998) considers horizontal mergers as a process to save costs
and for entering new markets to make use of overcapacity and reduce
competition. Empirical studies show that both the CAR of the bidder and the
target are positive for horizontal mergers (Bosveld, Meyer and Vorst, 1997).
Although vertical acquisition involves lower costs of procurement and
higher margines, synergies effects are unlikely due to lack of economies of scale
and the problems of integration (Morck, 1990). The motive of conglomerate
mergers is primarily diversification. The agency motive plays an important role in
44
conglomerate mergers which provide lowest returns since thare no virtually no
synergetic benefits to be achieved (Morck, 1990).
H0: Horizontal mergers do not attain better performance than vertical and
conglomerate mergers.
HA: Horizontal mergers attained better performance than vertical and
conglomerate mergers.
3.2.3 Method of Payment
Acquirers may use a variety of payment forms including cash, shares or a
mixed payment form. The advantages of payment using shares are the creation
of additional equity by issuing new shares and do not endanger the firm’s
liquidity. The chance of a too high takeover premium is limited with the payment
in shares since the shareholders of the target are also at risk with a high
premium. Bidders will opt for payment in shares only if they find their shares are
overvalued, the value of cash is easy to establish (Myers & Maljuf, 1984;
Berkovitch &Nrayanan, 1990). However, empirical evidences suggest acquirers
lose from share exchanges because it signals over valuation of acquirers stock
or uncertainty over the true value of the target, (Conn & Nielsen, 1977; Bradley,
1980; Dodd, 1980; Myers & Majluf, 1984; Franks & Harris, 1989; Loughran &
Vinjh, 1997; Walker 2000). However foreign bids primarily are all cash, partly due
to target shareholders reluctance to accept foreign equity (Gaughan, 2002).
Travlos (1987) reports negative abnormal returns when the operation is financed
with stocks but positive abnormal returns when it is financed with cash. In
45
addition, Antoniou and Zhao (2004) show that bidders’ returns are lower when
the operation is financed in stocks than in case of alternative, combined and cash
offers, confirming that the choice of payment method has an impact on the
profitability of a takeover. Form of payment is often cited for the presence of a
positive cross border effect for target shareholders.
H0: Payment in cash has no effect on the returns of the acquisition.
HA: Payment in cash has an effect on the returns of the acquisition.
3.2.4 Market Climate
The desire for firm growth through M&A might be caused by bad business
conditions. GDP index is a measure of national income and output for a give
country’s Economy. There is a positive relationship between GDP and M&A
activity (Steiner, 1975 and Guerard, 1989). Other studies have found a negative
relation between GDP growth and M&A activity (Beckenstein, 1979 and Becketti,
1986). The study on relation between industrial production, business failures,
stock prices, interest rates and M&A activity in the USA between 1947 and 1977
shows that a weakly positive relation between economic conditions and M&As
(Melicher, 1983).
H0: GDP growth has a positive effect on the returns of the acquisition.
HA: GDP growth has a negative effect on the returns of the acquisition.
46
3.2.5 Firm Size
Large firms maybe better able to realize efficiencies in term of talent and
technologies from target firm because they can apply these intangible assets
more sufficiently (Luypert and Huyghebaert, 2006). An increasing firm size may
improve company access to cheaper financing and create an internal market
where capital can be allocated more efficiently. Greater gains have been found to
accrue to acquirers the larger their target (Asquith et al, 1983; Jarrell & Poulsen,
1989; Markides & Ittner, 1994; Danbolt, 1995). The assertion is that large
combinations facilitate the exploitation of selling company resources, consistent
with the synergy motive for takeovers. Such amalgamations result in revenue
enhancement and cost savings via greater economies of scale in production,
marketing and distribution. Alternatively, large acquirers may overpay for smaller
targets due to insignificant wealth effects for them (Loderner & Martin, 1990).
H0: Firm size do not has an impact on shareholders wealth in M&A activites.
HA: Firm size has an impact on the shareholders wealth in M&A activites.
47
3.3 Data Collection and Methodology
3.3.1 Sample selection and data sources
Data collected will be based on secondary data. The sampling frame
consists of bids by domestic and foreign firms for Malaysia companies between
1st January 2004 and August 2008. Acquiring firms are publicly quoted
companies. For inclusion in the sample transactions are required to fit the
following criteria:
• The M&A deal is announced and completed within the 1st January 2004
and August 2008.
• Buyers are listed on the Kuala Lumpur Stock Exchange or listed
elsewhere. Targets are registered company in Malaysia or other countries.
• Accounting information, number of shares, capital changes, share prices
and returns
• Data for each company along with are available.
In this study, we will look into the GDP index of the host economies which
is Malaysia. The GDP index from 2004 to 2008 will be obtained from National
Summary Data Page for Malaysia provided by Bank Negara Malaysia.
3.3.2 Methodology
Event studies analyze the normalized share prices of the bidder and the
target around the time of announcement. The abnormal return is the return
exceeding the return expected if there were no merger announcement. The
48
actual return after the public bid should first be corrected and interpreted. The
Market Model Method is used to measure the abnormal return (Brown & Warner,
1980).
3.3.2.1 Market Model Method
An event study is employed to assess share price reaction around the
time of a M&A activities. Event studies have been extensively employed to
analyse domestic and international acquisitions, (Servaes & Zenner (1994),
Eckbo & Thornburn (2000), Corhay & Rad (2000), Goergen & Renneboog
(2004)). The market model has been used to compare the actual returns on a
security against that expected if there had been no bid. Under the assumption of
multivariate normality, abnormal returns (prediction error) to security j on day t :
ARjt = Rjt – (α +β jRmt)
Where ARjt = abnormal return to firm j on day t
Rjt = actual or realised return to security j on event day t
α + β jRmt = expected returns to security j on event day t
α = alpha and β = beta, the market model parameter estimates and
Rmt = market return on event day t.
Estimates for α and β are calculated over the estimation period using
OLS. Values of α and β are estimated by regressing Rjt on Rmt. The assumption
is that the intercept and slope terms, α and β, are constant over the time period
during which the model is fitted to the available data. These coefficients
49
represent the intercept and slope respectively of the market model regression.
This is run over a 200 day estimation period, from 250 trading days to 50 trading
days prior to the initial event date t, the first date of the official bid announcement.
Mikkelson & Partch (1988) and Mc Willliams et al, (1999) adopt a similar
estimation period. The regression analysis to compute the α and β coefficients
was finally performed on the period from t – 50 to t – 250 (200 days), assuming
that the stock return may be affected during the 200 days before the public
announcement of an agreement (as defined earlier) by any announcement or
event that relate to the acquisition. Furthermore, the fact of performing the linear
regression on 200 days affords us to get enough data entries to ensure the
statistical validity of our study.
3.3.2.2 CAR Method
The abnormal return of the combined merger partners TCARt at time t is
served as a measure of the total wealth effects of a takeover bid for each
participating firm. TCARt derive CARs based on a short window of (-5,+5) days,
similar to the US domestic study of Bradley, Desai & Kim (1988) and the
international study of Eun et al (1996). In the findings by Higson and Elliott
(1998), the performance computation was performed on 36 months, assuming
that it would set-up a long enough period to capture the post-takeover
performance of companies which reflected a high sensitivity of the post-bid
performance to the observation period. In this study, the performance
computations were done on the period from t +6, t+120 and t +180 days that will
50
allow observation for the actual performance of the new created entity. Such a
long period shows both the first excitement and then the disappointment of
investors that usually follow the acquisition event. Tests of the statistical
significance of abnormal returns for time t are carried out with a T test.
Figure 3.3.2.2.1: Event Window for CAR Evaluation
3.3.2.3 Bauman’s Methodology
In this studies, observation on acquire firms’ size. Referring to the
procedure used by Luypert and Huyghebaert (2006) to calculate firm size, using
the natural logarithm of total assets by replacing the log of total assets by the log
of total sales and by the log of the number of employees. A company is regarded
as small if not more than one of the following criteria is exceeded: an average
annual workforce of 50 employees, an annual turnover (excluding VAT) of €
7,300,000 and total assets of € 3,650,000. If the average annual workforce
exceeds 100 employees, a company is always considered as large. In another
study by Baumann (2003), the firm size measure by the natural log of the number
51
of employees. Upon the availability of data, the firm size is developed by
Bauman’s methodology in this study.
3.3.3 Data Analysis Techniques
In this paper, analysis will be done on SPSS or Eviews. Linear regression
will be done on the model to examine the effect of the determinants on the wealth
of shareholders. Stepwise regression models were fit for each of the format
choice using a minimum inclusion alpha of .05. Significance tests and beta
estimates were used to evaluate the magnitude and direction of the effect(s) of
the determinants
Regression Model:
Y = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5
Where Y = Total Cummulative Abnormal Return
X1 = International or Domestic Mergers
X2 = Direction of Mergers
X3 = Method of Payment
X4 = Firm Size
X5 = Market Climate
52
Summary of the process:
1. Selection of sample
2. Identification of selected securities and collection of stock prices and
market indexes data for the requested periods.
3. Importation of the collected data under Excel
4. Computing the coefficients to get individual Beta for every single security
by using the linear regression
5. Computation of the expected returns
6. Calculation of CARs for t+60, t+120 and t+180 days
7. Analysis of results
3.4 Conclusion
This chapter presented an overview of the research framework and
hypothesis developed for the study. This chapter also discussed the data
collection procedure, and the methodology, market model used to computing the
coefficients of individual beta for each company and CAR method to estimate the
measure the post merger shareholders’ wealth and method use to estimate the
firm size. Following that, Chapter 4 will discuss the empirical results and analysis
on each of the hypotheses as stated in this chapter.
53
Chapter 4
Empirical Results and Analysis
This chapter presents the empirical results and discusses all the findings
of this study. First of all, the results for the coefficients computations under the
software SPSS of individual beta will be shown. Then discuss about the results of
the individual Cumulative Abnormal Returns (CARs) of every M&A activity in the
sample.
4.1 α and β coefficients computations under SPSS Appendix 1 present the estimates for the α and β coefficients that were
mandatory in order to calculate the expected returns of the acquiring companies
under the Market Model. The coefficients are calculated under the software
SPSS by using a linear regression function across a 200 days period.
Coefficients(a)
Model Unstandardized
Coefficients Standardized Coefficients t Sig.
B Std. Error Beta B
Std. Error
1 (Constant) .114 .046 2.477 .014
Rm .060 .015 .256 3.925 .000Dependent Variable: Re
Table 4.1.1: Regression Analysis Results for Proton Holdings Berhad
Tables 4.1.1 presents the estimate for the α and β coefficients for Proton
Holdings Berhad. The accurate analysis for the aquirer can be done according to
the following example: Proton Holdings Berhad. The first column B-coefficient
54
indicates the y-intercept of the line and the column next to it named “Sig.”
defines the level of significance. In the case of Proton Holdings Berhad, the
significance 0.000 for the value 0.060 indicates that the β coefficient is
significantly different from zero, and that this value is 0.060. The Beta coefficient
informs about the correlation of the two variables, which means the level of
dependence of the security return (dependent variable) against the return of the
market index (independent variable). For Proton Holding, the value 0.256 shows
a positive level of dependence; when the market goes up, the Proton Holdings
Berhad security generally goes up as well.
In the specific case of Allianz – Proton Holding Berhad, the regression line may
be written as follows:
Re = 0.075 + 0.051 * Rm
Where:
- Re is the expected return on Proton Holding Berhad security at time t
- Rm is the return on the market index at time t
The analysis we have just performed is the same for every single acquirer
companies of the sample.
55
4.2 Results of CARs computations individually for each Acquirer Company
Appendix 2 presents the individual Cumulative Abnormal Return for every
acquirer of the 252 samples, the CAR and the median CAR for the periods t+60,
t+120,t+180, “t + 60” meaning 60 days after the public announcement date.
Furthermore it is critical to notice that, as previously stated,The CAR for the
acquirer company at time t+60 is the aggregated abnormal returns from time t +0
to t +60 (60days).
4.3 Regression Results
In the regression analysis, the cumulative abnormal returns of merger
announcements are analyzed using five independent variables. These
independent variables are used to explain the CAR of the acquirer for the period
of t+60, t+120 and t+180 days after the announcement date.
In Table 4.3.1, 4.3.2 and 4.3.3 shows the T-test results for the three post
announcement windows. Of the three post announcement windows, the 60 days
and 120 days windows immediately after the announcement date, only the firm
size and type of payment show significance to CAR. However, the 180 days
window all the independent variables show significant to CAR except for the GDP
Growth which shows no effect to the CAR. Table 4.3.4 shows the regression
result of T+180 days with only for independent variables which are Firm Size,
Type of Payment, Type of Merger and Location. From Table 4.3.4, the
regression equation is formed:
56
Y = -35.445 + 8.571 X1 + 18.268X2 - 17.870X3 +5.039X4 …Eqn (1)
Where Y = Total Cummulative Abnormal Return X1 = International or Domestic Mergers X2 = Type of Mergers X3 = Method of Payment X4 = Firm size
Coefficients(a)
Model Unstandardized
Coefficients Standardized Coefficients t Sig.
B Std. Error Beta B
Std. Error
1 (Constant) -37.205 25.393 -1.465 .144 FirmSizeLog 6.136 2.523 .154 2.432 .016 TypeofPaym
ent -18.062 4.311 -.263 -4.190 .000
TypeofMerger 9.281 4.803 .122 1.932 .055
GDPGrowth 2.285 3.649 .038 .626 .532 Location 6.028 4.319 .088 1.396 .164
a Dependent Variable: CAR
Table 4.3.1: Regression Analysis Results for T+60 days Post
Announcement Window
57
Coefficients(a)
Model Unstandardized
Coefficients Standardized Coefficients t Sig.
B Std. Error Beta B
Std. Error
1 (Constant) -34.086 21.051 -1.619 .107 FirmSizeLog 3.853 2.049 .122 1.880 .061 TypeofPaym
ent -10.451 3.502 -.191 -2.984 .003
TypeofMerger 5.923 3.874 .098 1.529 .128
Location 4.003 3.528 .073 1.135 .258 GDPGrowth 2.999 2.981 .063 1.006 .315
a Dependent Variable: CAR_120
Table 4.3.2: Regression Analysis Results for T+120 days Post
Announcement Window
Coefficients(a)
Model Unstandardized
Coefficients Standardized Coefficients t Sig.
B Std. Error Beta B
Std. Error
1 (Constant) -53.589 24.791 -2.162 .032 FirmSizeLog 5.090 2.413 .131 2.109 .036 TypeofPaym
ent -17.584 4.124 -.261 -4.263 .000
TypeofMerger 18.551 4.563 .251 4.066 .000
Location 8.674 4.154 .129 2.088 .038 GDPGrowth 2.862 3.511 .049 .815 .416
a Dependent Variable: CAR_180
Table 4.3.3: Regression Analysis Results for T+180 days Post
Announcement Window
58
Coefficients(a)
Model Unstandardized
Coefficients Standardized Coefficients t Sig.
B Std. Error Beta B
Std. Error
1 (Constant) -35.445 10.904 -3.251 .001 FirmSizeLog 5.039 2.411 .129 2.090 .038 TypeofPaym
ent -17.870 4.107 -.266 -4.352 .000
TypeofMerger 18.268 4.546 .247 4.018 .000
Location 8.571 4.150 .127 2.065 .040a Dependent Variable: CAR_180
Table 4.3.4: Regression Analysis Results for T+180 days Post
Announcement Window without GDP Growth
4.3.1 Cross border and Domestic Acquisition
From the regression equation, cross border M&A activities increase 8.571
times of return to the investors compare to the domestic M&A. The cross border
M&A activities in Malaysia actually increased the wealth of the acquirer
shareholders. The finding in this study is in consistent with Aw and Chatterjee,
2004 who only deal with acquirers from UK market that UK companies acquiring
domestic firms get better results than UK companies acquiring foreign companies
from U.S. In consistent with the multinational network theory, the geographically
diversification is of value to acquiring firms we would expect their announcement
returns to exceed those of domestic acquirers. In consistent with the study of
Chakrabarti, Jayaraman and Mukherjee, 2004, the result can be interpreted as
indicating the role of cultural distance as a source of value to the firms or due to
59
stricter selection criteria applied in choosing target firms from culturally distant
countries.
The cross border M&A activities act as vehicles to bridge imperfections in
factor, product and capital markets and can in the process result in value gains
for acquirers. Investment in industries or countries whose economic cycles are
not highly correlated may lower the overall volatility and risk in their earnings and
cash flows. Foreign exposure entails benefits and drawbacks in the form of
different economic rents and risks. There are studies show that diversified
international firms often exhibit a lower cost of capital than firms whose
investments are not well diversified (Chan, Karolyi and Stulz, 1992; Stulz, 1995a,
1995b and Stulz and Wasserfallen, 1995). Value creation will ensue for
acquirers from gaining access to a new market and to a different stream of cash
flows. By shifting the production or operation units to overseas will reduce
operating expenses. Firms attracted to emerging markets as they provide low
labor costs, inexpensive raw materials and low level of regulations (Dunning,
2000). M&A allows firm to leverage its intangible assets such as expertise,
brands, patents and proprietary technologies which will increase firm’s
competitive advantage in the market.
60
4.3.2 Direction of Merger
The regression result shows that the horizontal mergers attained better
performance than vertical and conglomerate mergers. The return from horizontal
merger is 18.268 times higher compare to the vertical and conglomerate
mergers. This result proves to be consistent with findings from previous event
studies that also illustrated that a significant part of potential synergies are
captured by the target firm. This is consistent with the empirical study of Bosveld,
Meyer and Vorst, 1997 that the CAR of the bidder is positive for horizontal
mergers.
Based on the theory of oligopoly, a horizontal merger can reduce the
monitoring costs by reducing the number of independent producers in the
industry (Stigler, 1964). The merging of the horizontal rivals will reduce the
competitors in the industry. Contrary with the monopoly theory horizontal
acquisitions are carried out in order to increase market power. Due to the high
fragmentation of the market and the global competitions the attainment of a
dominant market position by one single player seems highly questionable. A
horizontal merger will reduce the monitoring costs (by reducing the number of
independent firms in the industry) to the point where a collusive agreement
becomes profitable. The fewer the firms in the industry, the more visible are each
producer’s actions.
The horizontal merger aimed to achieve Economies of Scale in production
by eliminating duplication of facilities and operations and broadening the product
line, reducing investment in working capital, eliminating competition through
61
product concentration, reducing advertising costs, increasing market segments
and exercising better control over the market. It is also an indirect route to
achieving technical economies of large scale. The mergers will only profitable to
when the cost savings are sufficiently large.The result suggests that horizontal
M&A tend to lower integration costs and facilitate the realization of potential
synergies steaming from product strategies which will increase the wealth of the
acquirers’ shareholders.
The horizontal cross-border M&A is to establish a market presence
abroad. The horizontal cross-border M&As tend to raise industry concentration,
thereby potentially hurting consumers and benefiting local competitors. The
efficiency advantages realized include the avoidance of setup costs and of the
fixed costs of operating a production facility arising in the case of Greenfield FDI,
and the avoidance of transportation costs and trade barriers associated with
exporting.
However, the horizontal mergers will likely trigger an antitrust complaint on
the basis of large market shares and industry concentration which lead to an
anticompetitive problem. The horizontal mergers raise industry concentration,
and hence potentially lead to higher prices for consumers or, in the case of
intermediate goods, for downstream industries. The rivals identified their market
position is threaten by anticompetitive merger. Eckbo (1983) examines intra-
industry wealth effects of 191 horizontal mergers in the U.S. between 1963 and
1978, 65 of which were challenged by either the Department of Justice or the
Federal Trade Commission with violating Section 7 of the Clayton Act.
62
4.3.3 Method of Payment
The method of payment significantly influences the cumulated abnormal
returns to the shareholders of the acquirers. For three event windows the
cumulated abnormal returns are statistically significant. The method of payment
can thus be regarded as a determinant with significant impact on the success of
an M&A transaction. The method of payment has turned out to be a very
significant driver of the acquirers’ wealth. Consistent to our expectations target
returns are higher through payment in cash. The results are consistent to prior
research findings.
In the study of Eckbo, Giammarino and Heinkel (1990) develop an
asymmetric information model, the acquirer’s shareholders return is increasing
and convex in the fraction of the total offer that consists of cash. Cash
compensation is more favourable because it reflects the very good liquidity
situation enjoyed by the company. In addition, the relatively low valuation of
many companies on the stock market reduces the attractiveness of stocks as a
means of payment.
Prior research (Travlos (1987), shows that target shareholders prefer cash
payments. According to the hypothesis by Myers and Majluf (1984), bidders
prefer cash payments if they believe that their stocks are undervalued and vice
versa. The choice of the method of payment thus reveals private information of
the bidder management about the valuation of the bidder's stock und thereby
affects stock prices.With the method of payment the bidder sends a signal to the
63
capital market. The acquirer may uncover private information (about how the
bidder perceives the value of his stocks) that may not be reflected in the stock
price so far. If an acquirer pays for with stock he perceives the stock to be
cheaper than cash thus signaling the stock to be overvalued and vice versa.
Therefore, in the eyes of investors, the firm’s decision to use cash to finance the
deal constitutes a positive signal about the firm’s stock value, and the firm’s
decision to use stock financing conveys a negative signal about the firm’s stock
value and its future prospects.
The major risk of stock payment comes from the value-added
expectation, the stock exchange expand the shareholder’s base, leading to the
decline of earnings per share, when investors doubt the target firm’s ability of
getting back earnings per share, the stock price of acquirers will decline because
of dilution of earnings per share.
Loughran and Vijh (1997) conclude that the cash payment method has a
positive impact on the value of acquiring firms. One interpretation the result that
the method of payment is negatively related to the shareholders’ return is that the
capital markets in Malaysia are inefficient and do not consider the valuation
signal sent by the acquiring firms correctly in the stock price or do not believe in
an overvaluation of the acquirer’s stocks.
64
4.3.4 Firm Size
The regression analysis shows that the firm size has an impact on the
shareholders wealth in M&A activities. The increasing of firm size attained a
higher return compare to smaller firm. The result is consistent with the previous
studies. A firm performance increased with its size. The wealth gains to acquired
firm shareholders on announcement of a merger are positively influenced by the
firm size. A larger firm command more resources, enjoy superior economies of
scope and scale, and should therefore face a better post-acquisition process.
The result indicates that large firms have a better potential of realizing
synergies and managerial hubris and empire-building have a greater impact on
acquisitions by large firms. Larger firms command more resources, enjoy
superior economies of scope and scale, and should therefore face a better post-
acquisition process. The increasing firm size may improve company access to
cheaper financing and/or create an internal market where capital can be
allocated more efficiently. Large firms may be better able to realize efficiencies
from, for example, the internalization of talent or technologies from a target firm
because they can apply these assets on a sufficiently large scale. Furthermore,
large firms often have the financial resources needed to acquire other
companies. Hence, combining with a financially constrained target may create an
internal capital market, where capital is available at lower costs. Furthermore,
large firms to engage especially in diversifying M&A as there may be fewer
opportunities for further growth in their own industry.
65
4.3.5 Market Climate
The GDP growth does not affect the return of the shareholders. The
finding is contrast with the previous findings. However, the number of M&A
activities increased as the GDP growth index increase. The market conditions
are an importance influence in the volume of M&A activity. In Malaysia, good
market climate encourages M&A activities. Whether the acquirers will sustains
the M&A momentum depends on the economic climate.
An economic downturn will inevitably reduce the M&A deals due to firm
downsizing and cost reduction. The combination of low unemployment, record
stock prices, moderating consumer confidence, stable consumer prices, and
slumping housing market offers a mixed picture of the economy’s health. The
already slow industrial core, high gas prices, and sluggish housing market have
dampened consumer spending and hiring levels, suggesting that these factors
are beginning to take their toll. Firms will keep available cash flow for internal
development to survive through the rainy days instead of investing in the market.
The growth of Malaysia economy is accelerating, boosted by a dynamic,
knowledge based service sector and expanding manufacturing base. Noted that
2008 has a lower M&A deals due to the data had been collected until August
2008.
66
GDPGrowth6.7836.3275.9345.0004.997
Freque
ncy
125
100
75
50
25
0
GDPGrowth
Table 4.3.5.1: Number of M&A Deals from Year 2004 to 2008 in Malaysia
GDPGrowth YEAR Frequency Percent
2004 4.997 7 2.349 2005 5 48 16.107 2006 5.934 46 15.436 2007 6.327 139 46.644 2008 6.783 10 3.356
Total 250 83.893 System 48 16.107 298 100.000
67
4.4 Conclusion
Based on the results, the cross border M&A increased more of acquirer’s
shareholders’ return and the direction of merger, type of payment and firm size
have an impact on the acquirer shareholders’ wealth. The only variable that is
insignificant to the shareholders’ return is the GDP growth. The GDP growth
does not show any impact on the return of the shareholders. However, the
number of M&A activities increased as the GDP growth index increase. From the
research, it can conclude that cross border M&A with an effective post merger
strategy are more favorable to acquirers’ the shareholders’ wealth. Following by
Chapter 6, the last chapter of this study will present the summary and future
suggestions of this study.
68
Chapter 5
Summary and Conclusion
The final chapter presents the conclusion of this research. Firstly, an
overview of the study will be provided. Thereafter, the summary of the research
results and review of research objectives are discussed. Finally, the chapter ends
with suggestions for further research.
5.1 Overview of the study
M&As are popular means through which companies achieve economies of
scale, remove inefficient management or respond to economic shocks. In parallel
with the global trends, Malaysia accounted for 0.28% of the world total value of
cross border M&As sales and for 0.34% of the world’s M&A transaction total
value. Malaysia’s FDI outflow expanded from RM15.9 billion in 2004 to RM38
billion last year.
The prime objective of a firm is to grow profitably which can be achieved
through introducing or developing new products or by expanding or enlarging the
capacity of existing products. The motives of the acquirers are to cut costs,
create growth opportunities, gaining access to production and new technology.
The acquirers will be able to establish or broaden their presence in high-growth
markets and focus on low-cost environments for manufacturing and sourcing.
The acquirers will want to strengthen their competitive positions to resolve the
growing threat from emerging rivals by broadening and increasing its market
share. In cross border M&A, the geographical diversification will enhance
69
acquirers returns by opening up a whole new market and network for them.
Firms may make cross border M&As on the basis that industry returns across
economies maybe less correlated than within an economy which will lower their
risk and exposure to certain volatile industry segments to its portfolios. When
stock prices are sufficiently depressed, the takeover of a listed company may
constitute a bargain relative to investing in new facilities from scratch. .). In cross
border M&AS, government removes restrictions through active promotion and by
providing high standards of treatment, legal protection and guarantees to actract
FDI.
The successfulness of an M&A transaction is determined by a few factors.
The industry involved by the acquirers and targets which categorized to
horizontal, vertical and conglomerate. Horizontal mergers benefits in economies
scale of production and distribution, access to new markets, removal of inefficient
management, greater financial possibilities and combined intangible assets and
to limit the industry market by removing one of the merging parties as a potential
entrant into that relevant market. Vertical mergers attained shorter industrial
chain, procurement cost reduction, more efficient communication and focus on
market development which form a more cost efficient organization. The target for
conglomerate M&A is to diversify risk and attain economy scope. The value loss
associated with diversification generates large profit opportunities for outsiders.
The post-acquisition returns are found to be related to both the mode of
acquisition and the form of payment. The asymmetry information models which
explaining the choice of the payment method reveals private information of the
70
bidder concerning the value or the synergies of both firms. The decision to
finance an investment by stocks will be interpreted by the market as bad news,
so that the stock price of the firm will decrease at the announcement of the
acquisition and investors fear of acquiring overvalued stocks. In contrast, when
cash is offered, the assets of the bidder will be considered as being undervalued,
which constitutes a positive signal for investors.
The probability of gaining high return is when the size of the acquiring firm
is relatively large compared to the target firm. Large firms may be better able to
realize efficiencies from great talent or advance technologies from a target firm
because they can apply these assets on a sufficiently large scale. Large firms will
also have sufficient financial resources acquire other companies.
5.2 Summary of the Research Results
This study is to investigate the acquirers’ shareholder wealth effects for
domestic and international acquirers. The research was base on 252 samples
that engaged in takeovers in the Malaysia from year 2000 to 2007. Hypothesis is
developed base on cross border or domestic M&A, direction of merger, type of
payment, firm size and GDP growth. In the study, the Market Model used to
estimate the Beta of each acquirer and the post- merger shareholders’ return is
calculated using CAR.
71
5.2.1 A Review of the Research Objectives
In regards of the first objective in chapter 1, the cross border M&A
activities increase 8.571 times of return to the investors compare to the domestic
M&A. The cross border M&A activities in Malaysia actually increased the wealth
of the acquirer shareholders. The cross border merger as vehicles to bridge
imperfections in factor, product and capital markets and due to stricter selection
criteria applied in choosing target firms from culturally distant countries result in
value gains for acquirers. Value creation will ensue for acquirers from gaining
access to a new market and to a different stream of cash flows.
In regards of the second research objective, the direction of merger, type
of payment and firm size are the determinants that increase the return in
acquirer’s shareholder wealth in M&A activities and have an impact on the
acquirer shareholders’ wealth. This result of horizontal M&A proves to be
consistent with findings from previous event studies that also illustrated that a
significant part of potential synergies are captured by the target firm. The return
attained from horizontal merger is higher compare to the vertical and
conglomerate mergers. The method of payment significantly influences the
cumulated abnormal returns to the shareholders of the acquirers. Consistent to
our expectations target returns are higher through payment in cash. The wealth
gains to acquired firm shareholders on announcement of a merger are positively
influenced by the firm size. The result is consistent with the previous studies. A
firm performance increased with its size.
72
5.2.2 A Review of the Research Questions
What are the key success factors of a successful M&A transaction? The
result shows that the direction of merger, type of payment and firm size are the
key success factors and have an impact on the acquirer shareholders’ wealth.
The only variable that is insignificant to the shareholders’ return is the GDP
growth. The GDP growth does not show any impact on the return of the
shareholders. However, the number of M&A activities increased as the GDP
growth index increase.
Cross border or domestic M&As yield a better shareholders’ wealth? The
cross border M&A activities increase 8.571 times of return to the investors
compare to the domestic M&A. Investment in industries or countries whose
economic cycles are not highly correlated may lower the overall volatility and risk
in their earnings and cash flows. Cross border M&A enable firm gaining access
to a new market, a different stream of cash flows and leverage its intangible
assets. By shifting the production or operation units to overseas will reduce
operating expenses with the exposure low labor costs, inexpensive raw materials
and low level of regulations.
What key factors determine the shareholders’ wealth effects in M&A? The
return from horizontal merger is 18.268 times higher compare to the vertical
and conglomerate mergers. The horizontal merger will only profitable to when the
73
cost savings are sufficiently large by achieving Economies of Scale in production
by eliminating duplication of facilities and operations and broadening the product
line, reducing investment in working capital, eliminating competition through
product concentration, reducing advertising costs, increasing market segments
and exercising better control over the market.
The method of payment significantly influences the cumulated abnormal returns
to the shareholders of the acquirers. The method reveals private information of
the bidder management about the valuation of the bidder's stock. The method of
payment is negatively related to the shareholders’ return is that the capital
markets in Malaysia are inefficient and do not consider the valuation signal sent
by the acquiring firms correctly in the stock price or do not believe in an
overvaluation of the acquirer’s stocks.
The increasing of firm size attained a higher return compare to smaller firm. The
result indicates that large firms have a better potential of realizing synergies and
managerial hubris and empire-building have a greater impact on acquisitions by
large firms. Larger firms command more resources, enjoy superior economies of
scope and scale, access to cheaper financing which develop a better potential of
realizing synergies and managerial hubris and empire-building have a greater
impact on acquisitions by large firms.
74
The market conditions are important influence in the volume of M&A activity but
do not affect the return of the shareholders.
5.3 Suggestions for Future Research
This study only covers the pre-merger strategies that will increase
shareholders wealth. As such, several line of subsequent investigation on the
post merger strategies remains. The post merger strategy is mainly dealing with
the “people” issues and aligning the employees and the leadership with the new
culture which come the integration and implementation plans. The integration
plan is to run smoothly in order for the merger to take place and reap the benefits
from the synergy. The implementation plan which a task form need to be formed
in key functional areas to speed communication and speed decision making for
the momentum to be maintained to prevent any distraction from the workforce.
Further studies can be done on evaluating the effectiveness of the integration
and implementation plan for the synergy to take place. This may be done by
interviews or case studies to complement the findings and a longitudinal study
may help to further improve the results.
Lastly, it is also important to evaluate the post merger effect on
shareholders’ wealth from a different perspective. Although the pre mergers key
success factors play an important role in increasing the shareholders’ wealth, the
post merger integrations factors can not be neglected. Other factors such as the
stakeholders’ response towards the transaction, the top-down communications,
75
and different management culture may also become the important factors of
effecting the shareholders’ wealth.
76
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Appendix A The coefficients obtained OLS by SPSS for Beta calculation of Acquirers’ Company Announced/Initial Filing Date Target/Issuer Buyers/Investors Alpha(Constant)
BETA (Target Company)
02/09/2004 Jin Lin Wood Industries Bhd
Gefung Holdings Bhd (KLSE:GEFUNG)
0.075 0.051
03/09/2004 Asta Elektrodraht Gmbh & Co.
Metrod Malaysia Bhd (KLSE:METROD)
0.095 0.840
03/30/2004 Ayamas Food Corp. Bhd
QSR Brands Bhd (KLSE:QSR)
0.108 0.088
04/05/2004 Perusahaan Otomobil Nasional Bhd
Proton Holdings Bhd. (KLSE:PROTON)
0.114 0.060
05/31/2004 PT Jawa Power YTL Power International Bhd (KLSE:YTLPOWR)
0.156 0.087
06/22/2004 SMC Wheels BSA International Bhd (KLSE:BSA)
0.113 0.091
07/06/2004 Kumpulan Bertam Plantations Bhd
Kulim Malaysia Bhd (KLSE:KULIM)
0.098 0.110
11/01/2004 Cergas Kenari Sdn Bhd
Priceworth Wood Products Bhd (KLSE:PWORTH)
0.032 0.097
11/01/2004 Teras Selasih Priceworth Wood Products Bhd (KLSE:PWORTH)
0.032 0.097
89
11/20/2004 PT Satu Sembilan Delapan
Batu Kawan Bhd (KLSE:BKAWAN)
0.045 0.131
04/22/2005 London Clubs International plc
Genting Berhad (KLSE:GENTING)
0.006 0.193
04/27/2005 PT Bank CIMB Niaga Tbk (JKSE:BNGA)
Bumiputra-Commerce Holdings Berhad (KLSE:COMMERZ)
0.034 0.258
05/05/2005 Pelikan Holding AG (SWX:PEL)
Pelikan International Corporation Berhad (KLSE:PELIKAN)
-0.006 -0.029
06/02/2005 Infoscreen Networks Plc (AIM:INFO)
YTL E-Solutions Bhd (KLSE:YTLE)
0.058 0.011
06/20/2005 QSR Brands Bhd (KLSE:QSR)
Kulim Malaysia Bhd (KLSE:KULIM)
0.170 0.096
08/11/2005 HP Scitex Hewlett-Packard Company (NYSE:HPQ)
0.048 0.121
10/07/2005 ASE Test Ltd., Camera Module Assembly Operation
Flextronics International Ltd. (NasdaqGS:FLEX)
0.063 0.290
02/13/2006 Southern Bank Bhd
Bumiputra-Commerce Holdings Berhad (KLSE:COMMERZ)
-0.020 0.146
02/24/2006 Amtek Marketing Services Pte. Ltd.
Pensonic Holdings Bhd (KLSE:PENSONI)
-0.011 0.041
90
03/03/2006 American Express (Malaysia) Sdn. Bhd., Charge Card Operations and Merchant Acquiring Services
Malayan Banking Bhd (KLSE:MAYBANK)
-0.010 0.256
03/10/2006 Spice Communications Limited (BSE:532863)
Telekom Malaysia Bhd (KLSE:TM)
0.009 0.221
03/31/2006 Productos Pelikan, S.A. of C.V.
Pelikan International Corporation Berhad (KLSE:PELIKAN)
0.009 0.062
04/03/2006 MBF Carpenters Ltd.
MBF Holdings Bhd (KLSE:MBFHLDG)
0.011 0.013
04/25/2006 PT. Surya Sawit Sejati
United Plantations Bhd (KLSE:UTDPLT)
0.055 0.201
04/25/2006 PT. Mirza Pratama Putra
United Plantations Bhd (KLSE:UTDPLT)
0.055 0.055
05/17/2006 Malakoff Bhd MMC Corporation Bhd (KLSE:MMCCORP)
0.073 0.008
07/27/2006 Linshanhao Plywood (Sarawak) Sdn Bhd
WTK Holdings Bhd (KLSE:WTK)
0.016 0.052
07/28/2006 Sucasa Sdn Bhd. The Nomad Group Bhd
0.014 0.026
91
(KLSE:NOMAD)
08/04/2006 Boustead Naval Shipyard Sdn Bhd.
Boustead Holdings Bhd (KLSE:BSTEAD)
-0.004 0.108
08/08/2006 Alor Setar Holiday Villa Sdn Bhd
Advance Synergy Bhd (KLSE:ASB)
0.000 0.027
08/29/2006 Malaysia Smelting Corp. Bhd (KLSE:MSC)
Straits Trading Co. Ltd. (SGX:S20)
0.170 0.550
08/31/2006 Anticor Chimie SA Scomi Group Bhd (KLSE:SCOMI)
-0.002 0.075
09/12/2006 KFC Holdings Malaysia Bhd (KLSE:KFC)
QSR Brands Bhd (KLSE:QSR)
0.008 0.038
09/18/2006 Hicomobil Sdn Bhd.
General Motors Corporation (NYSE:GM)
0.034 0.055
09/20/2006 Empire Deluxe Sdn Bhd
JAKS Resources Berhad (KLSE:JAKS)
0.015 0.037
09/27/2006 Bright Steel Sdn Bhd
Lion Corp. Bhd (KLSE:LIONCOR)
-0.005 0.036
09/29/2006 United Plantations Bhd (KLSE:UTDPLT)
United International Enterprises Ltd. (CPSE/CPH:UIE)
-0.007 0.202
10/16/2006 Nestle S.A., Certain Canned Liquid Milk Businesses in South East Asia
Fraser & Neave Holdings Bhd (KLSE:F&N)
0.004 0.078
92
10/16/2006 Premier Milk (Malaya) Sdn Bhd
Fraser & Neave Holdings Bhd (KLSE:F&N)
0.004 0.078
10/16/2006 Nestle (Thailand) Ltd., Canned Liquid Milk Production Assets
Fraser & Neave Holdings Bhd (KLSE:F&N)
0.004 0.078
10/16/2006 Nestle Dairy (Thailand) Limited, Chilled Dairy and Juice Production Assets
Fraser & Neave Holdings Bhd (KLSE:F&N)
0.004 0.078
10/18/2006 Road Builder (M) Holdings Bhd.
IJM Corp. Bhd (KLSE:IJM)
-0.002 0.096
11/06/2006 PT Asuransi Aegis Indonesia
Kurnia Asia Bhd (KLSE:KURASIA)
0.022 0.118
11/13/2006 Bcom Holdings Sdn. Bhd.
Bolton Bhd (KLSE:BOLTON)
0.035 0.039
11/27/2006 Prosper Palm Oil Mill Sdn Bhd
Far East Holdings Bhd (KLSE:FAREAST); Winners Acres Sdn Bhd
0.015 0.108
11/27/2006 OSK Wealth Planners Sdn. Bhd.
OSK Holdings Bhd (KLSE:OSK)
0.025 0.045
11/27/2006 Sime Darby Bhd, Prior to Merger with Synergy Drive Bhd
Sime Darby Berhad (KLSE:SIME)
0.036 0.198
93
11/27/2006 Kumpulan Guthrie Bhd
Sime Darby Berhad (KLSE:SIME)
0.036 0.198
11/27/2006 Golden Hope Plantations Bhd
Sime Darby Berhad (KLSE:SIME)
0.036 0.198
11/27/2006 Highlands & Lowlands Bhd
Sime Darby Berhad (KLSE:SIME)
0.036 0.198
11/27/2006 Sime UEP Properties Bhd
Sime Darby Berhad (KLSE:SIME)
0.036 0.198
11/27/2006 Sime Engineering Services Bhd
Sime Darby Berhad (KLSE:SIME)
0.036 0.198
11/27/2006 Guthrie Ropel Bhd Sime Darby Berhad (KLSE:SIME)
0.036 0.198
11/27/2006 Mentakab Rubber Co. Malaya Bhd
Sime Darby Berhad (KLSE:SIME)
0.036 0.198
11/30/2006 The Right Channel Sdn Bhd
Media Prima Bhd (KLSE:MEDIA)
0.027 0.077
12/01/2006 E-CTAsia Technology Sdn. Bhd.
RCG Holdings Limited. (AIM:RCG)
0.030 0.030
12/01/2006 UCH Technology Sdn. Bhd.
RCG Holdings Limited. (AIM:RCG)
0.030 0.030
12/05/2006 The Palace Ventures Sdn. Bhd.
NPC Resources Bhd (KLSE:NPC)
0.084 0.049
12/07/2006 IQ Card Services Sdn Bhd
Rhythm Consolidated Bhd (KLSE:RHYTHM)
0.035 0.027
12/18/2006 Dr. W. Kolb AG Kuala Lumpur Kepong Bhd (KLSE:KLK)
0.019 0.128
94
12/28/2006 Engtex Ductile Iron Pipe Industry Sdn Bhd
Engtex Group Bhd (KLSE:ENGTEX)
0.045 0.038
12/29/2006 Boustead Naval Shipyard Sdn Bhd.
Boustead Holdings Bhd (KLSE:BSTEAD)
0.040 0.150
12/29/2006 Electronic Media Airtime Services Sdn Bhd
Heitech Padu Bhd (KLSE:HTPADU)
0.040 0.044
01/03/2007 NBG Communications Sdn Bhd
Keppel Telecommunications & Transportation Ltd. (SGX:K11)
0.068 0.065
01/10/2007 E&O Property Development Bhd
Eastern & Oriental Bhd (KLSE:E&O)
0.046 0.047
01/12/2007 Big Tree Outdoor Sdn Bhd
Media Prima Bhd (KLSE:MEDIA)
0.044 0.086
01/16/2007 P.T. Sarana Prima Multi Niaga
TSH Resources Bhd (KLSE:TSH)
0.054 0.059
01/18/2007 Everest Point Sdn. Bhd.
PJI Holdings Bhd (KLSE:PJI)
0.052 0.028
01/22/2007 Wintip Sdn. Bhd. Fitters Diversified Berhad (KLSE:FITTERS)
0.053 0.007
01/24/2007 Malaysia Transformer Manufacturing Sdn Bhd
Tenaga Nasional Bhd (KLSE:TENAGA)
0.064 0.075
01/29/2007 Alamjad Sdn Bhd. Aturmaju Resources Bhd
0.085 0.054
95
(KLSE:ATURMJU)
01/30/2007 PT Proton Tracoma Motors
Proton Holdings Bhd. (KLSE:PROTON)
0.068 0.079
01/31/2007 PHN Industry Sdn Bhd
DRB-HICOM Bhd (KLSE:DRBHCOM)
0.061 0.087
02/02/2007 PT Karya Makmur Abadi
Kuala Lumpur Kepong Bhd (KLSE:KLK)
-0.727 0.077
02/02/2007 PT Menteng Jaya Sawit Perdana
Kuala Lumpur Kepong Bhd (KLSE:KLK)
-0.727 0.077
02/13/2007 GRE Energy Co Ltd.
Evergreen Fibreboard Bhd (KLSE:EVERGRN)
0.069 0.065
02/26/2007 FEDERAL Auto Holdings Bhd
MBM Resources Bhd (KLSE:MBMR)
0.073 0.091
03/01/2007 PT Penta Valent Apex Healthcare Bhd (KLSE:AHEALTH)
0.070 0.119
03/02/2007 Excelle Timber Sdn. Bhd.
Subur Tiasa Holdings Bhd (KLSE:SUBUR)
0.061 0.045
03/06/2007 E&O - PIE Sdn Bhd
Eastern & Oriental Bhd (KLSE:E&O)
0.059 0.055
03/06/2007 Seal Polymer Industries Bhd
Supermax Corp. Bhd (KLSE:SUPERMX)
0.072 0.126
03/12/2007 Inorex Valve (M) Sdn Bhd
Unimech Group Bhd (KLSE:UNIMECH)
0.076 0.161
96
03/14/2007 Eurospiraal B.V. SAAG Consolidated (M) Bhd. (KLSE:SAAG)
0.084 0.041
03/16/2007 Wong Engineering Automation Sdn Bhd
Wong Engineering Corp. Bhd (KLSE:WONG)
0.095 0.023
03/19/2007 IJM Land Berhad (KLSE:IJMLAND)
IJM Corp. Bhd (KLSE:IJM)
0.010 0.082
03/22/2007 Jadeford International Limited
Lion Forest Industries Berhad (KLSE:LIONFIB)
0.047 0.036
03/23/2007 Ina Gail Pte Ltd Esthetics International Group Bhd (KLSE:EIG)
0.111 0.066
03/30/2007 PT Indoexchange Tbk
Integrax Bhd (KLSE:INTEGRA)
0.085 0.066
03/30/2007 Better Prospects Sdn Bhd.
NPC Resources Bhd (KLSE:NPC)
0.108 0.036
03/30/2007 Miracle Display Sdn Bhd.
NPC Resources Bhd (KLSE:NPC)
0.108 0.036
04/02/2007 Natuream Enviro-Services Sdn Bhd
Eastern Pacific Industrial Corp.Bhd (KLSE:EPIC)
0.116 0.101
04/02/2007 Hopematic International Sdn. Bhd.
INS Bioscience Bhd (KLSE:INSBIO)
0.108 0.023
04/02/2007 OSK Asia Capital Limited
OSK Holdings Bhd (KLSE:OSK)
0.082 0.116
04/04/2007 GTS Power Ltd. SAAG Consolidated (M) Bhd.
0.105 0.055
97
(KLSE:SAAG)
04/05/2007 MTD Walkers PLC (COSE:KAPI-N-0000)
MTD Capital Bhd (KLSE:MTD)
0.113 0.068
04/12/2007 Ann Joo Steel Berhad
Ann Joo Resources Bhd (KLSE:ANNJOO)
0.050 0.162
04/16/2007 IDS Sebor (Sarawak) Holdings Sdn. Bhd.
Integrated Distribution Services Group Ltd. (SEHK:2387)
0.079 0.132
04/16/2007 Sebor (Sabah) Sdn Bhd
Integrated Distribution Services Group Ltd. (SEHK:2387)
0.079 0.132
04/20/2007 Advanced Interconnect Technologies, Inc.
Unisem M Bhd (KLSE:UNISEM)
0.132 0.060
04/24/2007 MIHR Sdn. Bhd. The Nomad Group Bhd (KLSE:NOMAD)
0.122 0.088
04/27/2007 Circle Ring Network Sdn Bhd
EP Manufacturing Bhd (KLSE:EPMB)
0.146 0.048
04/30/2007 Mieco Smallholders Sdn Bhd
Mieco Chipboard Bhd (KLSE:MIECO)
0.131 0.075
04/30/2007 TNB Coal International Ltd
Tenaga Nasional Bhd (KLSE:TENAGA)
0.097 0.239
98
05/03/2007 Park May Bhd Konsortium Transnasional Bhd (KLSE:KTB)
0.141 0.006
05/03/2007 Borneo Lumber Industries Sdn Bhd
Subur Tiasa Holdings Bhd (KLSE:SUBUR)
0.138 0.040
05/08/2007 AMJ Properties Sdn Bhd.
A&M Realty Bhd (KLSE:A&M)
0.110 0.068
05/08/2007 UAC Bhd (KLSE:UAC)
Boustead Holdings Bhd (KLSE:BSTEAD)
0.106 0.133
05/09/2007 Latitude Tree International Limited
Latitude Tree Holdings Bhd (KLSE:LATITUD)
0.111 0.078
05/16/2007 Abric Micromechanics Sdn. Bhd
Abric Bhd (KLSE:ABRIC)
0.098 0.066
05/16/2007 Central Mercantile Corporation (M) Sdn. Bhd
WTK Holdings Bhd (KLSE:WTK)
0.062 0.155
05/17/2007 RHB Bank Berhad RHB Capital Bhd (KLSE:RHBCAP)
0.068 0.133
05/23/2007 Meganet Communications Sdn. Bhd.
VADS Bhd (KLSE:VADS)
0.160 0.080
05/31/2007 AIC Technology Sdn. Bhd.
AIC Corp. Bhd (KLSE:AIC)
0.131 0.042
06/01/2007 Expressway Lingkaran Tengah Sdn Bhd
Plus Expressways Bhd (KLSE:PLUS)
0.122 0.395
99
06/01/2007 Linkedua (Malaysia) Berhad
Plus Expressways Bhd (KLSE:PLUS)
0.122 0.395
06/04/2007 Extiva Communications Sdn. Bhd.
YTL E-Solutions Bhd (KLSE:YTLE)
0.109 0.035
06/05/2007 Ace Edible Oil Industries Sdn Bhd
Online One Corporation Bhd (KLSE:ONLINE)
0.140 0.065
06/05/2007 UOB Trustee (Malaysia) Bhd.
OSK Holdings Bhd (KLSE:OSK)
0.083 0.173
06/07/2007 Royal & Sun Alliance Insurance (M) Bhd
Boustead Holdings Bhd (KLSE:BSTEAD)
0.118 0.231
06/08/2007 Spectacular Potential Sdn Bhd
Far East Holdings Bhd (KLSE:FAREAST)
0.089 0.323
06/08/2007 Mitrajaya Development Lanka (Private) Limited
Mitrajaya Holdings Bhd (KLSE:MITRA)
0.117 0.140
06/08/2007 Summer Lodge Sdn Bhd
Sunrise Bhd (KLSE:SUNRISE)
0.098 0.216
06/11/2007 Sering Cemerlang Sdn. Bhd
KSL Holdings Bhd (KLSE:KSL)
0.128 0.113
06/15/2007 ECO Generation Co. Ltd.
Evergreen Fibreboard Bhd (KLSE:EVERGRN)
0.134 0.142
06/19/2007 AmInvestment Bank Group
AMMB Holdings Bhd (KLSE:AMMB)
0.111 0.265
06/19/2007 PT Farinda TSH Resources Bhd 0.114 0.162
100
Bersaudara (KLSE:TSH)
06/27/2007 ASTA International Pte. Ltd.
Metrod Malaysia Bhd (KLSE:METROD)
0.175 0.117
07/16/2007 Unisoft Holdings Limited
Silverlake Axis Ltd. (SGX:5CP)
0.111 0.150
07/25/2007 IJM Properties Sdn Bhd
IJM Land Berhad (KLSE:IJMLAND)
0.045 0.102
07/25/2007 RB Land Sdn. Bhd.
IJM Land Berhad (KLSE:IJMLAND)
0.191 0.060
07/25/2007 Bukit Bendera Resort Sdn. Bhd.
IJM Land Berhad (KLSE:IJMLAND)
0.191 0.060
07/25/2007 RB Development Sdn. Bhd.
IJM Land Berhad (KLSE:IJMLAND)
0.191 0.060
07/31/2007 Myanmar Mamee-Double Decker Ltd
Mamee-Double Decker M Bhd (KLSE:MAMEE)
0.164 0.219
07/31/2007 Mamee-Double Decker Foods (Suzhou) Co., Ltd
Mamee-Double Decker M Bhd (KLSE:MAMEE)
0.164 0.219
08/03/2007 Metrojaya Bhd Malayan United Industries Bhd (KLSE:MUIIND)
0.151 0.059
08/07/2007 H2 Energy Corporation Sdn Bhd
Ho Hup Construction Co. Bhd (KLSE:HOHUP)
0.174 0.079
08/09/2007 Ares Green Technology Corp (GTSM:3414)
Frontken Corporation Berhad (KLSE:FRONTKN)
0.148 0.078
101
08/14/2007 Central Offices Pte Ltd.
The Nomad Group Bhd (KLSE:NOMAD)
0.169 0.190
08/23/2007 Siam Fibreboard Co., Ltd.
Evergreen Fibreboard Bhd (KLSE:EVERGRN)
0.137 0.097
08/24/2007 Tamanaco Limited Genting Berhad (KLSE:GENTING)
0.120 0.223
08/27/2007 Phoenix Track Sdn Bhd
Resorts World Bhd (KLSE:RESORTS)
0.157 0.175
08/28/2007 Zhejiang Lin'an Jin Yuan Cement Co., Ltd.
YTL Cement Bhd (KLSE:YTLCMT)
0.083 0.229
08/30/2007 PMT Industries Sdn. Bhd.
Wah Seong Corporation Berhad (KLSE:WASEONG)
0.149 0.163
08/31/2007 Harvest E&I Engineering Sdn Bhd
Rotary Engineering Ltd. (SGX:R07)
0.130 0.127
09/03/2007 Everay Agritech Sdn. Bhd.
PW Consolidated Bhd (KLSE:PW)
0.184 0.059
09/07/2007 Berjaya Jet Charter Sdn Bhd.
Berjaya Land Bhd (KLSE:BJLAND)
0.103 0.128
09/11/2007 Advance Boilers Sdn. Bhd.
CB Industrial Product Holding Bhd (KLSE:CBIP)
0.124 0.179
09/11/2007 Ranhill Power Bhd Ranhill Bhd (KLSE:RANHILL)
0.157 0.053
09/12/2007 Hirotako Kein Hing Sdn. Bhd
Hirotako Holdings Bhd (KLSE:HIRO)
0.167 0.130
102
09/13/2007 Sunrise DCS Sdn Bhd
Sunrise Bhd (KLSE:SUNRISE)
0.087 0.171
09/14/2007 Pan Malaysia Holdings Bhd, 15 storey office building at No. 2, Jalan Changkat Ceylon, Kuala Lumpur
Pan Malaysian Industries Bhd (KLSE:PMIND)
0.157 0.019
09/17/2007 JF Apex Securities Bhd.
Apex Equity Holdings Bhd (KLSE:APEX)
0.137 0.132
09/18/2007 Ansa Teknik (Melaka) Sdn. Bhd.
Sunway Holdings Berhad (KLSE:SUNWAY)
0.073 0.190
09/19/2007 Prodelcon Sdn. Bhd.
AIC Corp. Bhd (KLSE:AIC)
0.172 0.047
09/19/2007 AIC Inspirasi Sdn Bhd, Brimal Holdings Sdn Bhd and Autovisor Plastics Sdn Bhd
AV Ventures Corp. Bhd (KLSE:AVENTUR)
0.154 0.088
09/21/2007 Rangkai Positif Sdn Bhd
DRB-HICOM Bhd (KLSE:DRBHCOM)
0.146 0.169
09/24/2007 QSP Chemie (M) Sdn. Bhd
Analabs Resources Bhd (KLSE:ANALABS)
0.157 0.081
09/24/2007 Herizen Investments Pte Ltd.
Baneng Holdings Bhd (KLSE:BANENG)
0.152 0.062
103
09/25/2007 Seashore Publishing (M) Sdn Bhd
Popular Holdings Ltd. (SGX:P29)
0.183 0.064
09/27/2007 Jasarim Bina Sdn Bhd
Paramount Corp. Bhd (KLSE:PARAMON)
0.128 0.261
10/01/2007 CCM Agriculture (Sabah) Sdn Bhd
Chemical Co. of Malaysia Bhd (KLSE:CCM)
0.183 0.178
10/01/2007 Highline Shipping Sdn Bhd
Hubline Bhd (KLSE:HUBLINE)
0.136 0.089
10/01/2007 Negara Properties M Bhd
Sime Darby Berhad (KLSE:SIME)
0.118 0.220
10/01/2007 FairPoint Packaging Sdn. Bhd.
Versatile Creative Bhd (KLSE:VERSATL)
0.178 0.049
10/02/2007 Concorde Hotel Hongkong Land Holdings Ltd. (SGX:H78)
0.159 0.231
10/02/2007 Green Energy and Technology Sdn Bhd
Octagon Consolidated Bhd (KLSE:OCTAGON)
0.165 0.060
10/03/2007 Fauzi Lim Plantation Sdn Bhd
MWE Holdings Bhd (KLSE:MWE)
0.137 0.128
10/05/2007 WorldCard International Ltd., Three Companies
Genting International plc (SGX:G13)
0.120 0.070
10/09/2007 Maho Engineering & Trading
Jurong Technologies
0.177 0.174
104
Industrial Corp. Ltd. (SGX:J09)
10/11/2007 HLG Credit Sdn Bhd
HLG Capital Bhd (KLSE:HLCAP)
0.101 0.142
10/11/2007 Pansprint Consolidated Sdn. Bhd.
Milux Corporation Bhd (KLSE:MILUX)
0.155 0.044
10/12/2007 Sing Guan Silk Screen (Cambodia) Co. Ltd.
Astral Supreme Bhd (KLSE:ASUPREM)
0.153 0.047
10/19/2007 OSK REIT Management Sdn Bhd
OSK Holdings Bhd (KLSE:OSK)
0.079 0.205
10/24/2007 Trc Development Sdn. Bhd.
TRC Synergy Bhd (KLSE:TRC)
0.076 0.115
10/24/2007 TRC Land Sdn Bhd
TRC Synergy Bhd (KLSE:TRC)
0.127 0.095
10/25/2007 Kin Yip Wood Industries Sdn. Bhd.
Maxtral Industry Bhd (KLSE:MAXTRAL)
0.114 0.128
10/30/2007 Sinmah Poultry Farm Sdn. Bhd.
Farm's Best Bhd (KLSE:FARMBES)
0.125 0.050
11/01/2007 Kemuncak Raya Sdn. Bhd.
Binaik Equity Bhd (KLSE:BINAIK)
0.114 0.128
11/01/2007 Binaik Yubina Sdn. Bhd.
Binaik Equity Bhd (KLSE:BINAIK)
0.114 0.128
11/01/2007 Maharani Properties Sdn. Bhd
Binaik Equity Bhd (KLSE:BINAIK)
0.114 0.128
105
11/01/2007 Johline Realty Sdn. Bhd.
Binaik Equity Bhd (KLSE:BINAIK)
0.114 0.128
11/09/2007 Nepline Zenergy Sdn Bhd.
Nepline Bhd (KLSE:NEPLINE)
0.116 0.070
11/12/2007 J. Gadsden (South Pacific) Limited
MBF Holdings Bhd (KLSE:MBFHLDG)
0.107 0.130
11/13/2007 Sindora Bhd (KLSE:SINDORA)
Kulim Malaysia Bhd (KLSE:KULIM)
0.117 0.222
11/14/2007 Empresa (M) Sendirian Berhad
CB Industrial Product Holding Bhd (KLSE:CBIP)
0.114 0.231
11/15/2007 Shanghai Jinshan Jinwei Chemical Company Ltd.
Kuala Lumpur Kepong Bhd (KLSE:KLK)
0.134 0.182
11/16/2007 Cosmo-Jupiter Berhad
Asiatic Development Bhd (KLSE:ASIATIC)
0.075 0.275
11/16/2007 Suzhou Goodway Rubber Products Co., Ltd.
Goodway Integrated Industries Bhd (KLSE:GOODWAY)
0.123 0.040
11/22/2007 CMS Steel Berhad Cahya Mata Sarawak Bhd (KLSE:CMSB)
0.065 0.130
11/22/2007 K-One Resources Sdn Bhd
K-One Technology Bhd (KLSE:K1)
0.121 0.031
11/22/2007 Ampangship Marine Sdn. Bhd.
Petra Perdana Bhd (KLSE:PETRA)
0.035 0.219
11/23/2007 Global Pacific Petroleum Sdn.
Analabs Resources Bhd
0.111 0.057
106
Bhd. (KLSE:ANALABS)
12/03/2007 Cleanway Disposal Services Pte. Ltd.
Analabs Resources Bhd (KLSE:ANALABS)
0.111 0.057
12/05/2007 KUB Singgahsana Sdn. Bhd.
Eden Inc. Berhad (KLSE:EDEN)
0.089 0.118
12/05/2007 KlienTec International Sdn. Bhd.
Esthetics International Group Bhd (KLSE:EIG)
0.113 0.170
12/07/2007 Esteem Packaging Pte Ltd.
Century Bond Bhd (KLSE:CENBOND)
0.116 0.151
12/10/2007 Vimas Joint Venture Company Limited
Berjaya Land Bhd (KLSE:BJLAND)
0.004 0.129
12/14/2007 Mesiniaga Scs Sdn. Bhd.
Mesiniaga Bhd (KLSE:MSNIAGA)
0.148 0.164
12/14/2007 Symphony BPO Solutions Sdn. Bhd.
Symphony House Bhd (KLSE:SYMPHNY)
0.102 0.073
12/18/2007 Konsortium Lebuhraya Butterworth-Kulim (KLBK) Sdn. Bhd.
Plus Expressways Bhd (KLSE:PLUS)
0.077 0.487
12/19/2007 633 Media Sdn. Bhd.
Health Management International Ltd. (SGX:588)
0.099 0.099
12/24/2007 PT Khaleda Agroprima Malindo
Metro Kajang Holdings Bhd (KLSE:METROK)
0.087 0.217
107
12/31/2007 Zagro Chemicals Sdn Bhd
Zagro Asia Ltd. (SGX:Z01)
0.095 0.070
01/03/2008 Muhibbah Engineering (Cambodia) Co., Ltd.
Muhibbah Engineering M Bhd (KLSE:MUHIBAH)
0.030 0.207
01/04/2008 PacificMas Bhd (KLSE:PACMAS)
Oversea-Chinese Banking Corp. Ltd. (SGX:O39)
0.064 0.711
01/11/2008 Victoria International College
Asia Pacific Land Bhd (KLSE:APLAND)
0.119 0.169
01/14/2008 Mahkota Medical Centre Sdn Bhd
Health Management International Ltd. (SGX:588)
0.104 0.119
01/16/2008 Fiamma Development Sdn Bhd
Fiamma Holdings Bhd (KLSE:FIAMMA)
0.133 0.150
01/17/2008 Jurus Positif Sdn. Bhd.
Mutiara Goodyear Development Bhd (KLSE:MUTIARA)
0.111 0.150
01/17/2008 CNX Solutions Sdn. Bhd.
REDtone International Bhd (KLSE:REDTONE)
0.144 0.096
01/30/2008 IPanel Pte. Ltd. Metronic Global Bhd (KLSE:MTRONIC)
0.159 0.095
02/06/2008 Oaksvilla Sdn Bhd Fiamma Holdings Bhd (KLSE:FIAMMA)
0.094 0.148
02/06/2008 Uniphoenix Jaya Fiamma Holdings 0.094 0.148
108
Sdn Bhd Bhd (KLSE:FIAMMA)
02/25/2008 Godrej Gokarna Oil Palm Limited
IJM Plantations Bhd (KLSE:IJMPLNT)
0.006 0.330
02/25/2008 Maju Warisanmas Sdn. Bhd.
Weida M Bhd (KLSE:WEIDA)
0.094 0.319
02/26/2008 TCB Reinsurance Sdn Bhd.
Tradewinds Corp. Bhd (KLSE:TWSCORP)
0.062 0.184
03/26/2008 PT Bank Internasional Indonesia (JKSE:BNII)
Malayan Banking Bhd (KLSE:MAYBANK)
0.149 0.324
03/26/2008 JPH Logging Sdn. Bhd.
Subur Tiasa Holdings Bhd (KLSE:SUBUR)
0.177 0.238
03/31/2008 AMBC Controls Sdn. Bhd.
AMDB Bhd. (KLSE:AMDB)
0.075 0.113
04/01/2008 Seremban Engineering Sdn Bhd
Success Transformer Corp Bhd (KLSE:SUCCESS)
0.055 0.315
04/11/2008 Symphony BPO Solutions Sdn. Bhd.
Symphony House Bhd (KLSE:SYMPHNY)
0.140 0.212
04/18/2008 Sepangar Chemical Industry Sdn Bhd
Lingui Developments Bhd. (KLSE:LINGUI)
0.220 0.314
04/23/2008 Raikon Building Management Co.
GuocoLand (Malaysia) Berhad
0.050 0.155
109
Sdn Bhd (KLSE:GUOCO)
04/23/2008 Khee San Bhd (KLSE:KHEESAN)
London Biscuits Bhd (KLSE:LONBISC)
0.167 0.262
04/24/2008 Milan Resources Sdn Bhd
Ekovest Bhd (KLSE:EKOVEST)
0.169 0.332
04/28/2008 Faber Medi-Serve Sdn Bhd
Faber Group Bhd (KLSE:FABER)
0.093 0.271
05/05/2008 Tradewinds Hotels & Resorts Sdn Bhd
Tradewinds Corp. Bhd (KLSE:TWSCORP)
0.090 0.196
05/06/2008 KKB Industries (Sabah) Sdn. Bhd.
KKB Engineering Bhd (KLSE:KKB)
0.060 0.203
05/14/2008 PMB Carbon Sdn Bhd
PMB Technology Bhd (KLSE:PMBTECH)
0.027 0.134
05/16/2008 Transmission Technology Sdn Bhd
Malaysian Resources Corp. Bhd (KLSE:MRCB)
0.036 0.326
05/22/2008 Asia Pacific Trade and Expo City Sdn. Bhd.
Malaysia Pacific Corporation Berhad (KLSE:MPCORP)
-0.040 0.122
05/30/2008 PT Bank Lippo Tbk
PT Bank CIMB Niaga Tbk (JKSE:BNGA)
0.013 0.294
06/02/2008 PT Bank Lippo Tbk
Bumiputra-Commerce Holdings Berhad (KLSE:COMMERZ)
0.036 0.469
06/04/2008 Manulife Asset Management
Manulife Holdings Berhad
-0.022 0.425
110
(Malaysia) Sdn. Bhd.
(KLSE:MANULFE)
06/06/2008 Ranhill Utilities Bhd
Ranhill Bhd (KLSE:RANHILL); Lambang Optima Sdn Bhd
-0.006 0.215
06/16/2008 Symphony BPO Solutions Sdn. Bhd.
Symphony House Bhd (KLSE:SYMPHNY)
0.027 0.201
06/18/2008 Universal Building Products Sdn. Bhd.
MTD ACPI Engineering Berhad (KLSE:MTDACPI)
0.101 0.330
06/19/2008 Kurnia Insurance (Thailand) Company Limited
Kurnia Asia Bhd (KLSE:KURASIA)
0.077 0.465
06/27/2008 Malaysian Re (Dubai) Ltd.
MNRB Holdings Bhd (KLSE:MNRB)
0.011 0.522
06/30/2008 Spice Communications Limited (BSE:532863)
Green Acre Agro Services Private Limited; Idea Cellular Limited (BSE/NSE:532822); Telekom Malaysia Bhd (KLSE:TM)
-0.001 0.363
07/01/2008 Enex-Dynamic Sdn. Bhd.
Fiamma Holdings Bhd (KLSE:FIAMMA)
0.010 0.181
07/01/2008 Anzpac Services (Australia) Pty. Limited
Tien Wah Press Holdings Bhd (KLSE:TIENWAH);
-0.007 0.062
111
New Toyo International Holdings Ltd. (SGX:N08)
07/04/2008 PT. CB Polaindo CB Industrial Product Holding Bhd (KLSE:CBIP)
0.048 0.409
07/18/2008 KDU College Sdn Bhd
Paramount Corp. Bhd (KLSE:PARAMON)
0.049 0.475
08/01/2008 Sunshine Amanjaya Sdn Bhd.
Suiwah Corp. Bhd (KLSE:SUIWAH)
0.027 0.212
08/04/2008 Aliran Ihsan Resources Berhad (KLSE:AIRB)
MMC Corporation Bhd (KLSE:MMCCORP)
0.065 0.179
08/05/2008 Motosikal Dan Enjin Nasional Sdn. Bhd.
DRB-HICOM Bhd (KLSE:DRBHCOM)
0.107 0.394
08/06/2008 MEG Management Sdn. Bhd.
Magnus Energy Group Ltd. (SGX:576)
-0.039 0.054
08/07/2008 Beribu Ukiran Sdn. Bhd.
Karambunai Corp. Bhd (KLSE:KBUNAI)
0.056 0.241
08/08/2008 MCB Bank Ltd. (KASE:MCB)
Malayan Banking Bhd (KLSE:MAYBANK)
0.076 0.264
08/12/2008 Mushtari Engineering &
Eastern Pacific Industrial Corp.Bhd
0.085 0.453
113
Appendix B The CAR calculations of the Acquirers. Announced/Initial Filing Date Target/Issuer Buyers/Investors CAR (T+60) CAR(T+120) CAR(T+180) 02/09/2004 Jin Lin Wood
Industries Bhd Gefung Holdings Bhd (KLSE:GEFUNG)
-39.145 -41.360 -420.529
03/09/2004 Asta Elektrodraht Gmbh & Co.
Metrod Malaysia Bhd (KLSE:METROD)
-5.937 -9.301 -110.641
03/30/2004 Ayamas Food Corp. Bhd
QSR Brands Bhd (KLSE:QSR)
-5.767 -18.441 -17.035
04/05/2004 Perusahaan Otomobil Nasional Bhd
Proton Holdings Bhd. (KLSE:PROTON)
-28.217 -32.197 -18.273
05/31/2004 PT Jawa Power YTL Power International Bhd (KLSE:YTLPOWR)
-57.627 -61.850 -37.091
06/22/2004 SMC Wheels BSA International Bhd (KLSE:BSA)
-9.875 -17.291 -11.280
07/06/2004 Kumpulan Bertam Plantations Bhd
Kulim Malaysia Bhd (KLSE:KULIM)
-9.854 -8.599 -2.573
11/01/2004 Cergas Kenari Sdn Bhd
Priceworth Wood Products Bhd (KLSE:PWORTH)
37.630 -4.500 -102.001
11/01/2004 Teras Selasih Priceworth Wood Products Bhd (KLSE:PWORTH)
37.630 -4.500 -102.001
114
11/20/2004 PT Satu Sembilan Delapan
Batu Kawan Bhd (KLSE:BKAWAN)
3.527 -0.360 -0.628
04/22/2005 London Clubs International plc
Genting Berhad (KLSE:GENTING)
0.855 4.314 9.412
04/27/2005 PT Bank CIMB Niaga Tbk (JKSE:BNGA)
Bumiputra-Commerce Holdings Berhad (KLSE:COMMERZ)
3.459 10.492 14.089
05/05/2005 Pelikan Holding AG (SWX:PEL)
Pelikan International Corporation Berhad (KLSE:PELIKAN)
-19.789 22.631 11.220
06/02/2005 Infoscreen Networks Plc (AIM:INFO)
YTL E-Solutions Bhd (KLSE:YTLE)
14.117 1.439 0.090
06/20/2005 QSR Brands Bhd (KLSE:QSR)
Kulim Malaysia Bhd (KLSE:KULIM)
-7.079 -13.867 -23.577
08/11/2005 HP Scitex Hewlett-Packard Company (NYSE:HPQ)
7.662 16.045 15.783
10/07/2005 ASE Test Ltd., Camera Module Assembly Operation
Flextronics International Ltd. (NasdaqGS:FLEX)
-6.499 -13.799 -10.559
02/13/2006 Southern Bank Bhd
Bumiputra-Commerce Holdings Berhad (KLSE:COMMERZ)
7.536 5.938 7.285
02/24/2006 Amtek Marketing Services Pte. Ltd.
Pensonic Holdings Bhd (KLSE:PENSONI)
6.626 -1.411 -2.397
115
03/03/2006 American Express (Malaysia) Sdn. Bhd., Charge Card Operations and Merchant Acquiring Services
Malayan Banking Bhd (KLSE:MAYBANK)
2.544 5.938 4.452
03/10/2006 Spice Communications Limited (BSE:532863)
Telekom Malaysia Bhd (KLSE:TM)
3.286 -4.749 -5.499
03/31/2006 Productos Pelikan, S.A. of C.V.
Pelikan International Corporation Berhad (KLSE:PELIKAN)
19.167 -4.749 18.612
04/03/2006 MBF Carpenters Ltd.
MBF Holdings Bhd (KLSE:MBFHLDG)
33.839 33.561 69.237
04/25/2006 PT. Surya Sawit Sejati
United Plantations Bhd (KLSE:UTDPLT)
-5.468 1.901 -1.872
04/25/2006 PT. Mirza Pratama Putra
United Plantations Bhd (KLSE:UTDPLT)
-5.468 1.901 -1.872
05/17/2006 Malakoff Bhd MMC Corporation Bhd (KLSE:MMCCORP)
-21.241 -24.060 -11.174
07/27/2006 Linshanhao Plywood (Sarawak) Sdn Bhd
WTK Holdings Bhd (KLSE:WTK)
37.469 63.095 68.957
07/28/2006 Sucasa Sdn Bhd. The Nomad Group Bhd
0.984 1.878 4.962
116
(KLSE:NOMAD)
08/04/2006 Boustead Naval Shipyard Sdn Bhd.
Boustead Holdings Bhd (KLSE:BSTEAD)
2.676 6.681 4.682
08/08/2006 Alor Setar Holiday Villa Sdn Bhd
Advance Synergy Bhd (KLSE:ASB)
-1.495 27.350 47.135
08/29/2006 Malaysia Smelting Corp. Bhd (KLSE:MSC)
Straits Trading Co. Ltd. (SGX:S20)
-3.305 -5.317 -1.896
08/31/2006 Anticor Chimie SA Scomi Group Bhd (KLSE:SCOMI)
0.839 17.583 39.585
09/12/2006 KFC Holdings Malaysia Bhd (KLSE:KFC)
QSR Brands Bhd (KLSE:QSR)
5.863 0.607 12.490
09/18/2006 Hicomobil Sdn Bhd.
General Motors Corporation (NYSE:GM)
10.712 -3.326 -9.320
09/20/2006 Empire Deluxe Sdn Bhd
JAKS Resources Berhad (KLSE:JAKS)
15.681 18.190 13.243
09/27/2006 Bright Steel Sdn Bhd
Lion Corp. Bhd (KLSE:LIONCOR)
14.664 37.894 58.390
09/29/2006 United Plantations Bhd (KLSE:UTDPLT)
United International Enterprises Ltd. (CPSE/CPH:UIE)
9.544 20.517 19.689
10/16/2006 Nestle S.A., Certain Canned Liquid Milk Businesses in South East Asia
Fraser & Neave Holdings Bhd (KLSE:F&N)
13.118 13.795 11.997
117
10/16/2006 Premier Milk (Malaya) Sdn Bhd
Fraser & Neave Holdings Bhd (KLSE:F&N)
13.118 13.795 11.997
10/16/2006 Nestle (Thailand) Ltd., Canned Liquid Milk Production Assets
Fraser & Neave Holdings Bhd (KLSE:F&N)
13.118 13.795 11.997
10/16/2006 Nestle Dairy (Thailand) Limited, Chilled Dairy and Juice Production Assets
Fraser & Neave Holdings Bhd (KLSE:F&N)
13.118 13.795 11.997
10/18/2006 Road Builder (M) Holdings Bhd.
IJM Corp. Bhd (KLSE:IJM)
11.734 35.576 32.947
11/06/2006 PT Asuransi Aegis Indonesia
Kurnia Asia Bhd (KLSE:KURASIA)
-7.496 -8.997 -6.441
11/13/2006 Bcom Holdings Sdn. Bhd.
Bolton Bhd (KLSE:BOLTON)
18.420 27.940 35.092
11/27/2006 Prosper Palm Oil Mill Sdn Bhd
Far East Holdings Bhd (KLSE:FAREAST); Winners Acres Sdn Bhd
16.904 14.602 18.893
11/27/2006 OSK Wealth Planners Sdn. Bhd.
OSK Holdings Bhd (KLSE:OSK)
13.391 42.102 50.618
11/27/2006 Sime Darby Bhd, Prior to Merger with Synergy Drive Bhd
Sime Darby Berhad (KLSE:SIME)
24.471 21.812 37.789
118
11/27/2006 Kumpulan Guthrie Bhd
Sime Darby Berhad (KLSE:SIME)
24.471 21.812 37.789
11/27/2006 Golden Hope Plantations Bhd
Sime Darby Berhad (KLSE:SIME)
24.471 21.812 37.789
11/27/2006 Highlands & Lowlands Bhd
Sime Darby Berhad (KLSE:SIME)
24.471 21.812 37.789
11/27/2006 Sime UEP Properties Bhd
Sime Darby Berhad (KLSE:SIME)
24.471 21.812 37.789
11/27/2006 Sime Engineering Services Bhd
Sime Darby Berhad (KLSE:SIME)
24.471 21.812 37.789
11/27/2006 Guthrie Ropel Bhd Sime Darby Berhad (KLSE:SIME)
24.471 21.812 37.789
11/27/2006 Mentakab Rubber Co. Malaya Bhd
Sime Darby Berhad (KLSE:SIME)
24.471 21.812 37.789
11/30/2006 The Right Channel Sdn Bhd
Media Prima Bhd (KLSE:MEDIA)
-6.622 -8.579 -7.883
12/01/2006 E-CTAsia Technology Sdn. Bhd.
RCG Holdings Limited. (AIM:RCG)
36.266 53.796 24.712
12/01/2006 UCH Technology Sdn. Bhd.
RCG Holdings Limited. (AIM:RCG)
36.266 53.796 24.712
12/05/2006 The Palace Ventures Sdn. Bhd.
NPC Resources Bhd (KLSE:NPC)
-7.003 10.183 9.538
12/07/2006 IQ Card Services Sdn Bhd
Rhythm Consolidated Bhd (KLSE:RHYTHM)
-23.355 -35.099 -51.206
12/18/2006 Dr. W. Kolb AG Kuala Lumpur Kepong Bhd (KLSE:KLK)
20.201 10.423 7.565
119
12/28/2006 Engtex Ductile Iron Pipe Industry Sdn Bhd
Engtex Group Bhd (KLSE:ENGTEX)
39.051 36.694 43.043
12/29/2006 Boustead Naval Shipyard Sdn Bhd.
Boustead Holdings Bhd (KLSE:BSTEAD)
15.506 23.735 34.746
12/29/2006 Electronic Media Airtime Services Sdn Bhd
Heitech Padu Bhd (KLSE:HTPADU)
12.335 -7.474 -2.746
01/03/2007 NBG Communications Sdn Bhd
Keppel Telecommunications & Transportation Ltd. (SGX:K11)
23.284 27.672 57.063
01/10/2007 E&O Property Development Bhd
Eastern & Oriental Bhd (KLSE:E&O)
9.941 46.310 43.080
01/12/2007 Big Tree Outdoor Sdn Bhd
Media Prima Bhd (KLSE:MEDIA)
-1.521 5.529 11.549
01/16/2007 P.T. Sarana Prima Multi Niaga
TSH Resources Bhd (KLSE:TSH)
40.886 53.885 56.651
01/18/2007 Everest Point Sdn. Bhd.
PJI Holdings Bhd (KLSE:PJI)
36.166 39.100 34.750
01/22/2007 Wintip Sdn. Bhd. Fitters Diversified Berhad (KLSE:FITTERS)
-5.165 -7.333 2.454
01/24/2007 Malaysia Transformer Manufacturing Sdn Bhd
Tenaga Nasional Bhd (KLSE:TENAGA)
-7.813 -7.932 -14.865
01/29/2007 Alamjad Sdn Bhd. Aturmaju Resources Bhd
-25.084 -13.367 -15.629
120
(KLSE:ATURMJU)
01/30/2007 PT Proton Tracoma Motors
Proton Holdings Bhd. (KLSE:PROTON)
-8.552 -35.078 -28.852
01/31/2007 PHN Industry Sdn Bhd
DRB-HICOM Bhd (KLSE:DRBHCOM)
-2.207 -12.947 4.266
02/02/2007 PT Karya Makmur Abadi
Kuala Lumpur Kepong Bhd (KLSE:KLK)
15.316 60.386 85.623
02/02/2007 PT Menteng Jaya Sawit Perdana
Kuala Lumpur Kepong Bhd (KLSE:KLK)
23.284 60.386 85.623
02/13/2007 GRE Energy Co Ltd.
Evergreen Fibreboard Bhd (KLSE:EVERGRN)
9.986 43.276 22.671
02/26/2007 FEDERAL Auto Holdings Bhd
MBM Resources Bhd (KLSE:MBMR)
-11.281 -2.008 -10.945
03/01/2007 PT Penta Valent Apex Healthcare Bhd (KLSE:AHEALTH)
-2.718 -8.918 -7.116
03/02/2007 Excelle Timber Sdn. Bhd.
Subur Tiasa Holdings Bhd (KLSE:SUBUR)
4.501 -2.067 -25.435
03/06/2007 E&O - PIE Sdn Bhd
Eastern & Oriental Bhd (KLSE:E&O)
41.907 36.918 37.739
03/06/2007 Seal Polymer Industries Bhd
Supermax Corp. Bhd (KLSE:SUPERMX)
-36.950 -35.182 -46.277
03/12/2007 Inorex Valve (M) Sdn Bhd
Unimech Group Bhd (KLSE:UNIMECH)
-2.648 4.775 1.318
121
03/14/2007 Eurospiraal B.V. SAAG Consolidated (M) Bhd. (KLSE:SAAG)
49.880 108.778 95.167
03/16/2007 Wong Engineering Automation Sdn Bhd
Wong Engineering Corp. Bhd (KLSE:WONG)
0.162 13.475 -10.604
03/19/2007 IJM Land Berhad (KLSE:IJMLAND)
IJM Corp. Bhd (KLSE:IJM)
3.250 0.803 -7.934
03/22/2007 Jadeford International Limited
Lion Forest Industries Berhad (KLSE:LIONFIB)
-6.724 -49.378 -67.709
03/23/2007 Ina Gail Pte Ltd Esthetics International Group Bhd (KLSE:EIG)
0.349 12.668 -9.930
03/30/2007 PT Indoexchange Tbk
Integrax Bhd (KLSE:INTEGRA)
2.474 11.169 13.561
03/30/2007 Better Prospects Sdn Bhd.
NPC Resources Bhd (KLSE:NPC)
12.522 19.540 10.637
03/30/2007 Miracle Display Sdn Bhd.
NPC Resources Bhd (KLSE:NPC)
23.284 19.540 10.637
04/02/2007 Natuream Enviro-Services Sdn Bhd
Eastern Pacific Industrial Corp.Bhd (KLSE:EPIC)
19.214 45.733 29.481
04/02/2007 Hopematic International Sdn. Bhd.
INS Bioscience Bhd (KLSE:INSBIO)
-3.292 39.749 6.791
04/02/2007 OSK Asia Capital Limited
OSK Holdings Bhd (KLSE:OSK)
3.162 1.040 -18.849
04/04/2007 GTS Power Ltd. SAAG Consolidated (M) Bhd.
48.272 44.278 36.096
122
(KLSE:SAAG)
04/05/2007 MTD Walkers PLC (COSE:KAPI-N-0000)
MTD Capital Bhd (KLSE:MTD)
-4.342 6.701 22.694
04/12/2007 Ann Joo Steel Berhad
Ann Joo Resources Bhd (KLSE:ANNJOO)
27.318 19.166 24.678
04/16/2007 IDS Sebor (Sarawak) Holdings Sdn. Bhd.
Integrated Distribution Services Group Ltd. (SEHK:2387)
10.875 5.780 27.330
04/16/2007 Sebor (Sabah) Sdn Bhd
Integrated Distribution Services Group Ltd. (SEHK:2387)
23.284 5.780 27.330
04/20/2007 Advanced Interconnect Technologies, Inc.
Unisem M Bhd (KLSE:UNISEM)
-21.876 -52.813 -31.079
04/24/2007 MIHR Sdn. Bhd. The Nomad Group Bhd (KLSE:NOMAD)
-0.250 -16.112 -16.877
04/27/2007 Circle Ring Network Sdn Bhd
EP Manufacturing Bhd (KLSE:EPMB)
1.553 -8.297 -15.887
04/30/2007 Mieco Smallholders Sdn Bhd
Mieco Chipboard Bhd (KLSE:MIECO)
-19.602 -35.169 -42.482
04/30/2007 TNB Coal International Ltd
Tenaga Nasional Bhd (KLSE:TENAGA)
-3.909 -15.246 -27.159
123
05/03/2007 Park May Bhd Konsortium Transnasional Bhd (KLSE:KTB)
35.173 35.209 25.094
05/03/2007 Borneo Lumber Industries Sdn Bhd
Subur Tiasa Holdings Bhd (KLSE:SUBUR)
-6.982 -35.315 -49.386
05/08/2007 AMJ Properties Sdn Bhd.
A&M Realty Bhd (KLSE:A&M)
17.073 -27.062 -9.055
05/08/2007 UAC Bhd (KLSE:UAC)
Boustead Holdings Bhd (KLSE:BSTEAD)
18.576 53.693 77.338
05/09/2007 Latitude Tree International Limited
Latitude Tree Holdings Bhd (KLSE:LATITUD)
-9.774 -35.543 -40.002
05/16/2007 Abric Micromechanics Sdn. Bhd
Abric Bhd (KLSE:ABRIC)
13.334 -8.450 -5.969
05/16/2007 Central Mercantile Corporation (M) Sdn. Bhd
WTK Holdings Bhd (KLSE:WTK)
-11.493 -67.161 -65.441
05/17/2007 RHB Bank Berhad RHB Capital Bhd (KLSE:RHBCAP)
7.359 12.262 13.677
05/23/2007 Meganet Communications Sdn. Bhd.
VADS Bhd (KLSE:VADS)
-5.178 16.687 -19.224
05/31/2007 AIC Technology Sdn. Bhd.
AIC Corp. Bhd (KLSE:AIC)
22.069 6.525 12.507
06/01/2007 Expressway Lingkaran Tengah Sdn Bhd
Plus Expressways Bhd (KLSE:PLUS)
-1.362 -8.859 -12.074
124
06/01/2007 Linkedua (Malaysia) Berhad
Plus Expressways Bhd (KLSE:PLUS)
-19.602 -8.859 -12.074
06/04/2007 Extiva Communications Sdn. Bhd.
YTL E-Solutions Bhd (KLSE:YTLE)
12.514 -5.624 2.198
06/05/2007 Ace Edible Oil Industries Sdn Bhd
Online One Corporation Bhd (KLSE:ONLINE)
-7.280 0.691 8.678
06/05/2007 UOB Trustee (Malaysia) Bhd.
OSK Holdings Bhd (KLSE:OSK)
-11.283 -14.079 -22.741
06/07/2007 Royal & Sun Alliance Insurance (M) Bhd
Boustead Holdings Bhd (KLSE:BSTEAD)
34.694 45.624 52.290
06/08/2007 Spectacular Potential Sdn Bhd
Far East Holdings Bhd (KLSE:FAREAST)
-19.602 -4.305 -0.733
06/08/2007 Mitrajaya Development Lanka (Private) Limited
Mitrajaya Holdings Bhd (KLSE:MITRA)
16.928 8.482 -9.596
06/08/2007 Summer Lodge Sdn Bhd
Sunrise Bhd (KLSE:SUNRISE)
-15.498 -9.736 -18.107
06/11/2007 Sering Cemerlang Sdn. Bhd
KSL Holdings Bhd (KLSE:KSL)
-5.967 -32.754 -63.745
06/15/2007 ECO Generation Co. Ltd.
Evergreen Fibreboard Bhd (KLSE:EVERGRN)
-22.057 -2.846 -24.868
06/19/2007 AmInvestment Bank Group
AMMB Holdings Bhd (KLSE:AMMB)
-14.273 -11.498 -24.790
06/19/2007 PT Farinda TSH Resources Bhd -18.102 -8.906 0.778
125
Bersaudara (KLSE:TSH)
06/27/2007 ASTA International Pte. Ltd.
Metrod Malaysia Bhd (KLSE:METROD)
-8.314 -12.052 -16.924
07/16/2007 Unisoft Holdings Limited
Silverlake Axis Ltd. (SGX:5CP)
-36.454 -38.573 -50.479
07/25/2007 IJM Properties Sdn Bhd
IJM Land Berhad (KLSE:IJMLAND)
11.751 0.359 1.922
07/25/2007 RB Land Sdn. Bhd.
IJM Land Berhad (KLSE:IJMLAND)
-19.602 0.359 1.922
07/25/2007 Bukit Bendera Resort Sdn. Bhd.
IJM Land Berhad (KLSE:IJMLAND)
-19.602 0.359 1.922
07/25/2007 RB Development Sdn. Bhd.
IJM Land Berhad (KLSE:IJMLAND)
-19.602 0.359 1.922
07/31/2007 Myanmar Mamee-Double Decker Ltd
Mamee-Double Decker M Bhd (KLSE:MAMEE)
-17.889 -25.556 -36.867
07/31/2007 Mamee-Double Decker Foods (Suzhou) Co., Ltd
Mamee-Double Decker M Bhd (KLSE:MAMEE)
-17.889 -25.556 -36.867
08/03/2007 Metrojaya Bhd Malayan United Industries Bhd (KLSE:MUIIND)
0.774 5.493 -5.566
08/07/2007 H2 Energy Corporation Sdn Bhd
Ho Hup Construction Co. Bhd (KLSE:HOHUP)
21.468 -26.775 -42.473
08/09/2007 Ares Green Technology Corp (GTSM:3414)
Frontken Corporation Berhad (KLSE:FRONTKN)
-9.050 -18.707 -35.002
126
08/14/2007 Central Offices Pte Ltd.
The Nomad Group Bhd (KLSE:NOMAD)
-6.459 -15.890 -22.764
08/23/2007 Siam Fibreboard Co., Ltd.
Evergreen Fibreboard Bhd (KLSE:EVERGRN)
5.661 -13.455 -35.494
08/24/2007 Tamanaco Limited Genting Berhad (KLSE:GENTING)
-3.034 -8.096 -14.186
08/27/2007 Phoenix Track Sdn Bhd
Resorts World Bhd (KLSE:RESORTS)
-5.745 -12.339 -16.524
08/28/2007 Zhejiang Lin'an Jin Yuan Cement Co., Ltd.
YTL Cement Bhd (KLSE:YTLCMT)
-1.487 -4.788 -10.935
08/30/2007 PMT Industries Sdn. Bhd.
Wah Seong Corporation Berhad (KLSE:WASEONG)
-2.527 -5.957 -53.425
08/31/2007 Harvest E&I Engineering Sdn Bhd
Rotary Engineering Ltd. (SGX:R07)
6.393 -10.081 -33.952
09/03/2007 Everay Agritech Sdn. Bhd.
PW Consolidated Bhd (KLSE:PW)
-22.984 -36.984 -50.870
09/07/2007 Berjaya Jet Charter Sdn Bhd.
Berjaya Land Bhd (KLSE:BJLAND)
74.558 107.880 95.412
09/11/2007 Advance Boilers Sdn. Bhd.
CB Industrial Product Holding Bhd (KLSE:CBIP)
14.752 19.055 -12.100
09/11/2007 Ranhill Power Bhd Ranhill Bhd (KLSE:RANHILL)
-25.397 -36.269 -78.230
09/12/2007 Hirotako Kein Hing Sdn. Bhd
Hirotako Holdings Bhd (KLSE:HIRO)
-7.608 -10.121 -26.602
127
09/13/2007 Sunrise DCS Sdn Bhd
Sunrise Bhd (KLSE:SUNRISE)
-7.705 -10.986 -55.085
09/14/2007 Pan Malaysia Holdings Bhd, 15 storey office building at No. 2, Jalan Changkat Ceylon, Kuala Lumpur
Pan Malaysian Industries Bhd (KLSE:PMIND)
31.509 25.726 -33.316
09/17/2007 JF Apex Securities Bhd.
Apex Equity Holdings Bhd (KLSE:APEX)
-3.858 -3.592 -7.352
09/18/2007 Ansa Teknik (Melaka) Sdn. Bhd.
Sunway Holdings Berhad (KLSE:SUNWAY)
0.161 -13.090 -56.552
09/19/2007 Prodelcon Sdn. Bhd.
AIC Corp. Bhd (KLSE:AIC)
-1.069 6.049 -18.281
09/19/2007 AIC Inspirasi Sdn Bhd, Brimal Holdings Sdn Bhd and Autovisor Plastics Sdn Bhd
AV Ventures Corp. Bhd (KLSE:AVENTUR)
-19.434 -53.705 -65.369
09/21/2007 Rangkai Positif Sdn Bhd
DRB-HICOM Bhd (KLSE:DRBHCOM)
-4.071 -24.544 -52.123
09/24/2007 QSP Chemie (M) Sdn. Bhd
Analabs Resources Bhd (KLSE:ANALABS)
-0.194 -4.251 -16.490
09/24/2007 Herizen Investments Pte Ltd.
Baneng Holdings Bhd (KLSE:BANENG)
-14.169 -40.483 -20.110
128
09/25/2007 Seashore Publishing (M) Sdn Bhd
Popular Holdings Ltd. (SGX:P29)
-16.015 -32.524 -45.950
09/27/2007 Jasarim Bina Sdn Bhd
Paramount Corp. Bhd (KLSE:PARAMON)
-6.962 13.669 -23.621
10/01/2007 CCM Agriculture (Sabah) Sdn Bhd
Chemical Co. of Malaysia Bhd (KLSE:CCM)
-12.797 -19.195 -31.230
10/01/2007 Highline Shipping Sdn Bhd
Hubline Bhd (KLSE:HUBLINE)
-28.065 -57.525 -59.257
10/01/2007 Negara Properties M Bhd
Sime Darby Berhad (KLSE:SIME)
1.743 1.944 -19.276
10/01/2007 FairPoint Packaging Sdn. Bhd.
Versatile Creative Bhd (KLSE:VERSATL)
-19.730 19.086 60.986
10/02/2007 Concorde Hotel Hongkong Land Holdings Ltd. (SGX:H78)
-0.189 -11.134 -25.112
10/02/2007 Green Energy and Technology Sdn Bhd
Octagon Consolidated Bhd (KLSE:OCTAGON)
0.245 -16.889 -17.634
10/03/2007 Fauzi Lim Plantation Sdn Bhd
MWE Holdings Bhd (KLSE:MWE)
-2.829 -6.600 -19.777
10/05/2007 WorldCard International Ltd., Three Companies
Genting International plc (SGX:G13)
-3.165 -20.416 -26.736
10/09/2007 Maho Engineering & Trading
Jurong Technologies
-42.090 -63.114 -87.400
129
Industrial Corp. Ltd. (SGX:J09)
10/11/2007 HLG Credit Sdn Bhd
HLG Capital Bhd (KLSE:HLCAP)
-4.275 -12.342 -27.071
10/11/2007 Pansprint Consolidated Sdn. Bhd.
Milux Corporation Bhd (KLSE:MILUX)
3.305 -9.034 -4.514
10/12/2007 Sing Guan Silk Screen (Cambodia) Co. Ltd.
Astral Supreme Bhd (KLSE:ASUPREM)
-9.159 -22.093 -16.821
10/19/2007 OSK REIT Management Sdn Bhd
OSK Holdings Bhd (KLSE:OSK)
-12.179 -25.188 -34.272
10/24/2007 Trc Development Sdn. Bhd.
TRC Synergy Bhd (KLSE:TRC)
15.193 3.873 -10.357
10/24/2007 TRC Land Sdn Bhd
TRC Synergy Bhd (KLSE:TRC)
15.193 3.873 -10.357
10/25/2007 Kin Yip Wood Industries Sdn. Bhd.
Maxtral Industry Bhd (KLSE:MAXTRAL)
-14.755 -27.772 -41.479
10/30/2007 Sinmah Poultry Farm Sdn. Bhd.
Farm's Best Bhd (KLSE:FARMBES)
-48.424 -64.360 -74.741
11/01/2007 Kemuncak Raya Sdn. Bhd.
Binaik Equity Bhd (KLSE:BINAIK)
-10.959 -37.470 -35.997
11/01/2007 Binaik Yubina Sdn. Bhd.
Binaik Equity Bhd (KLSE:BINAIK)
-10.959 -37.470 -35.997
11/01/2007 Maharani Properties Sdn. Bhd
Binaik Equity Bhd (KLSE:BINAIK)
-10.959 -37.470 -35.997
130
11/01/2007 Johline Realty Sdn. Bhd.
Binaik Equity Bhd (KLSE:BINAIK)
-10.959 -37.470 -35.997
11/09/2007 Nepline Zenergy Sdn Bhd.
Nepline Bhd (KLSE:NEPLINE)
8.355 22.798 22.655
11/12/2007 J. Gadsden (South Pacific) Limited
MBF Holdings Bhd (KLSE:MBFHLDG)
11.762 -12.112 -12.341
11/13/2007 Sindora Bhd (KLSE:SINDORA)
Kulim Malaysia Bhd (KLSE:KULIM)
12.926 -3.616 -7.870
11/14/2007 Empresa (M) Sendirian Berhad
CB Industrial Product Holding Bhd (KLSE:CBIP)
-1.590 -34.492 -35.423
11/15/2007 Shanghai Jinshan Jinwei Chemical Company Ltd.
Kuala Lumpur Kepong Bhd (KLSE:KLK)
2.192 -16.098 -11.936
11/16/2007 Cosmo-Jupiter Berhad
Asiatic Development Bhd (KLSE:ASIATIC)
13.277 1.152 3.241
11/16/2007 Suzhou Goodway Rubber Products Co., Ltd.
Goodway Integrated Industries Bhd (KLSE:GOODWAY)
-7.987 -12.628 -1.738
11/22/2007 CMS Steel Berhad Cahya Mata Sarawak Bhd (KLSE:CMSB)
-7.076 -14.014 -9.412
11/22/2007 K-One Resources Sdn Bhd
K-One Technology Bhd (KLSE:K1)
4.060 -59.767 -62.239
11/22/2007 Ampangship Marine Sdn. Bhd.
Petra Perdana Bhd (KLSE:PETRA)
-6.834 -30.640 -12.335
11/23/2007 Global Pacific Petroleum Sdn.
Analabs Resources Bhd
-2.259 -12.964 -11.100
131
Bhd. (KLSE:ANALABS)
12/03/2007 Cleanway Disposal Services Pte. Ltd.
Analabs Resources Bhd (KLSE:ANALABS)
-2.259 -11.773 -11.100
12/05/2007 KUB Singgahsana Sdn. Bhd.
Eden Inc. Berhad (KLSE:EDEN)
-14.305 -46.611 -50.860
12/05/2007 KlienTec International Sdn. Bhd.
Esthetics International Group Bhd (KLSE:EIG)
-9.330 -8.761 -14.621
12/07/2007 Esteem Packaging Pte Ltd.
Century Bond Bhd (KLSE:CENBOND)
-5.616 5.016 -3.818
12/10/2007 Vimas Joint Venture Company Limited
Berjaya Land Bhd (KLSE:BJLAND)
7.250 9.391 -14.573
12/14/2007 Mesiniaga Scs Sdn. Bhd.
Mesiniaga Bhd (KLSE:MSNIAGA)
-17.843 -21.930 -5.678
12/14/2007 Symphony BPO Solutions Sdn. Bhd.
Symphony House Bhd (KLSE:SYMPHNY)
-8.244 -18.645 -12.564
12/18/2007 Konsortium Lebuhraya Butterworth-Kulim (KLBK) Sdn. Bhd.
Plus Expressways Bhd (KLSE:PLUS)
-1.596 -5.406 -11.565
12/19/2007 633 Media Sdn. Bhd.
Health Management International Ltd. (SGX:588)
-0.511 -14.009 11.753
12/24/2007 PT Khaleda Agroprima Malindo
Metro Kajang Holdings Bhd (KLSE:METROK)
-2.681 -3.708 -18.330
132
12/31/2007 Zagro Chemicals Sdn Bhd
Zagro Asia Ltd. (SGX:Z01)
10.409 -24.890 13.660
01/03/2008 Muhibbah Engineering (Cambodia) Co., Ltd.
Muhibbah Engineering M Bhd (KLSE:MUHIBAH)
-0.823 -18.294 -37.578
01/04/2008 PacificMas Bhd (KLSE:PACMAS)
Oversea-Chinese Banking Corp. Ltd. (SGX:O39)
-0.141 -2.779 -8.210
01/11/2008 Victoria International College
Asia Pacific Land Bhd (KLSE:APLAND)
-47.075 -35.929 -39.445
01/14/2008 Mahkota Medical Centre Sdn Bhd
Health Management International Ltd. (SGX:588)
-11.837 15.599 11.100
01/16/2008 Fiamma Development Sdn Bhd
Fiamma Holdings Bhd (KLSE:FIAMMA)
-16.552 0.534 0.814
01/17/2008 Jurus Positif Sdn. Bhd.
Mutiara Goodyear Development Bhd (KLSE:MUTIARA)
-7.822 10.500 9.350
01/17/2008 CNX Solutions Sdn. Bhd.
REDtone International Bhd (KLSE:REDTONE)
-30.732 -34.217 -50.362
01/30/2008 IPanel Pte. Ltd. Metronic Global Bhd (KLSE:MTRONIC)
-38.723 -36.287 -14.660
02/06/2008 Oaksvilla Sdn Bhd Fiamma Holdings Bhd (KLSE:FIAMMA)
-16.552 0.534 0.814
02/06/2008 Uniphoenix Jaya Fiamma Holdings -16.552 15.599 0.814
133
Sdn Bhd Bhd (KLSE:FIAMMA)
02/25/2008 Godrej Gokarna Oil Palm Limited
IJM Plantations Bhd (KLSE:IJMPLNT)
-0.053 1.156 -32.599
02/25/2008 Maju Warisanmas Sdn. Bhd.
Weida M Bhd (KLSE:WEIDA)
-8.679 -12.567 -12.677
02/26/2008 TCB Reinsurance Sdn Bhd.
Tradewinds Corp. Bhd (KLSE:TWSCORP)
-8.679 -50.008 -57.963
03/26/2008 PT Bank Internasional Indonesia (JKSE:BNII)
Malayan Banking Bhd (KLSE:MAYBANK)
-12.288 -10.939 -18.708
03/26/2008 JPH Logging Sdn. Bhd.
Subur Tiasa Holdings Bhd (KLSE:SUBUR)
-3.750 -0.317 -17.991
03/31/2008 AMBC Controls Sdn. Bhd.
AMDB Bhd. (KLSE:AMDB)
-12.570 -21.596 -41.282
04/01/2008 Seremban Engineering Sdn Bhd
Success Transformer Corp Bhd (KLSE:SUCCESS)
15.883 4.556 0.199
04/11/2008 Symphony BPO Solutions Sdn. Bhd.
Symphony House Bhd (KLSE:SYMPHNY)
3.177 -2.829 -11.141
04/18/2008 Sepangar Chemical Industry Sdn Bhd
Lingui Developments Bhd. (KLSE:LINGUI)
-8.859 -25.142 -49.046
04/23/2008 Raikon Building Management Co.
GuocoLand (Malaysia) Berhad
-13.052 -15.775 -40.471
134
Sdn Bhd (KLSE:GUOCO)
04/23/2008 Khee San Bhd (KLSE:KHEESAN)
London Biscuits Bhd (KLSE:LONBISC)
-14.899 -18.963 -34.526
04/24/2008 Milan Resources Sdn Bhd
Ekovest Bhd (KLSE:EKOVEST)
-18.800 -19.379 -27.163
04/28/2008 Faber Medi-Serve Sdn Bhd
Faber Group Bhd (KLSE:FABER)
-6.576 -5.813 -58.055
05/05/2008 Tradewinds Hotels & Resorts Sdn Bhd
Tradewinds Corp. Bhd (KLSE:TWSCORP)
-31.647 -26.516 -92.796
05/06/2008 KKB Industries (Sabah) Sdn. Bhd.
KKB Engineering Bhd (KLSE:KKB)
-8.517 -15.121 -31.502
05/14/2008 PMB Carbon Sdn Bhd
PMB Technology Bhd (KLSE:PMBTECH)
-22.162 -26.253 -5.292
05/16/2008 Transmission Technology Sdn Bhd
Malaysian Resources Corp. Bhd (KLSE:MRCB)
-34.208 -79.045 -48.131
05/22/2008 Asia Pacific Trade and Expo City Sdn. Bhd.
Malaysia Pacific Corporation Berhad (KLSE:MPCORP)
-27.771 9.080 9.980
05/30/2008 PT Bank Lippo Tbk
PT Bank CIMB Niaga Tbk (JKSE:BNGA)
-0.110 -22.583 -73.060
06/02/2008 PT Bank Lippo Tbk
Bumiputra-Commerce Holdings Berhad (KLSE:COMMERZ)
-4.885 -12.666 -26.542
06/04/2008 Manulife Asset Management
Manulife Holdings Berhad
-1.186 4.958 -26.811
135
(Malaysia) Sdn. Bhd.
(KLSE:MANULFE)
06/06/2008 Ranhill Utilities Bhd
Ranhill Bhd (KLSE:RANHILL); Lambang Optima Sdn Bhd
12.079 -24.133 -34.627
06/16/2008 Symphony BPO Solutions Sdn. Bhd.
Symphony House Bhd (KLSE:SYMPHNY)
-8.500 -16.292 -37.386
06/18/2008 Universal Building Products Sdn. Bhd.
MTD ACPI Engineering Berhad (KLSE:MTDACPI)
-30.925 -37.487 58.274
06/19/2008 Kurnia Insurance (Thailand) Company Limited
Kurnia Asia Bhd (KLSE:KURASIA)
-10.313 -53.119 -34.948
06/27/2008 Malaysian Re (Dubai) Ltd.
MNRB Holdings Bhd (KLSE:MNRB)
-2.990 -20.003 -22.232
06/30/2008 Spice Communications Limited (BSE:532863)
Green Acre Agro Services Private Limited; Idea Cellular Limited (BSE/NSE:532822); Telekom Malaysia Bhd (KLSE:TM)
7.791 1.843 -1.271
07/01/2008 Enex-Dynamic Sdn. Bhd.
Fiamma Holdings Bhd (KLSE:FIAMMA)
2.915 -25.931 4.005
07/01/2008 Anzpac Services (Australia) Pty. Limited
Tien Wah Press Holdings Bhd (KLSE:TIENWAH);
17.763 -14.934 43.089
136
New Toyo International Holdings Ltd. (SGX:N08)
07/04/2008 PT. CB Polaindo CB Industrial Product Holding Bhd (KLSE:CBIP)
2.490 -25.299 -47.330
07/18/2008 KDU College Sdn Bhd
Paramount Corp. Bhd (KLSE:PARAMON)
-2.540 -7.630 -9.398
08/01/2008 Sunshine Amanjaya Sdn Bhd.
Suiwah Corp. Bhd (KLSE:SUIWAH)
-5.007 -10.289 -11.378
08/04/2008 Aliran Ihsan Resources Berhad (KLSE:AIRB)
MMC Corporation Bhd (KLSE:MMCCORP)
1.623 -41.360 -39.884
08/05/2008 Motosikal Dan Enjin Nasional Sdn. Bhd.
DRB-HICOM Bhd (KLSE:DRBHCOM)
-15.505 -29.944 -31.980
08/06/2008 MEG Management Sdn. Bhd.
Magnus Energy Group Ltd. (SGX:576)
33.132 20.619 6.296
08/07/2008 Beribu Ukiran Sdn. Bhd.
Karambunai Corp. Bhd (KLSE:KBUNAI)
20.405 7.697 10.797
08/08/2008 MCB Bank Ltd. (KASE:MCB)
Malayan Banking Bhd (KLSE:MAYBANK)
-14.786 -31.826 -32.493
08/12/2008 Mushtari Engineering &
Eastern Pacific Industrial Corp.Bhd
-21.704 -31.429 -24.038
138
Appendix C The data collection of the independent variable for each acquirer company. Announced/Initial Filing Date
Target/Issuer Buyers/Investors
1) Domestic 2) Cross Border
1)CASH Merger 2)Stock Merger3)Cash & Stock Merger
Firm Size (Log of Number of Employees
1) Horizontal2) Vertical/ Conglomerate
Annual GDP Growth
02/09/2004 Jin Lin Wood Industries Bhd
Gefung Holdings Bhd (KLSE:GEFUNG)
1 2 2.507855872
1 6.783
03/09/2004 Asta Elektrodraht Gmbh & Co.
Metrod Malaysia Bhd (KLSE:METROD)
2 1 2.736396502
1 6.783
03/30/2004 Ayamas Food Corp. Bhd
QSR Brands Bhd (KLSE:QSR)
1 2 4.342422681
2 6.783
04/05/2004 Perusahaan Otomobil Nasional Bhd
Proton Holdings Bhd. (KLSE:PROTON)
1 2 3.978864984
1 6.783
05/31/2004 PT Jawa Power YTL Power International Bhd (KLSE:YTLPOWR)
2 2 3.312600439
1 6.783
06/22/2004 SMC Wheels BSA 2 2 3.04296907 1 6.783
139
International Bhd (KLSE:BSA)
3
07/06/2004 Kumpulan Bertam Plantations Bhd
Kulim Malaysia Bhd (KLSE:KULIM)
1 1 4.071108422
1 6.783
11/01/2004 Cergas Kenari Sdn Bhd
Priceworth Wood Products Bhd (KLSE:PWORTH)
1 1 3.425208051
1 6.783
11/01/2004 Teras Selasih Priceworth Wood Products Bhd (KLSE:PWORTH)
1 1 3.425208051
1 6.783
11/20/2004 PT Satu Sembilan Delapan
Batu Kawan Bhd (KLSE:BKAWAN)
2 2 2.72916479 1 6.783
04/22/2005 London Clubs International plc
Genting Berhad (KLSE:GENTING)
2 1 4.431363764
1 4.997
04/27/2005 PT Bank CIMB Niaga Tbk (JKSE:BNGA)
Bumiputra-Commerce Holdings Berhad (KLSE:COMMERZ)
2 1 4.408477405
1 4.997
05/05/2005 Pelikan Holding AG (SWX:PEL)
Pelikan International Corporation Berhad
2 2 2.633468456
1 4.997
140
(KLSE:PELIKAN)
06/02/2005 Infoscreen Networks Plc (AIM:INFO)
YTL E-Solutions Bhd (KLSE:YTLE)
2 1 1.903089987
1 4.997
06/20/2005 QSR Brands Bhd (KLSE:QSR)
Kulim Malaysia Bhd (KLSE:KULIM)
1 2 4.071108422
2 4.997
08/11/2005 HP Scitex Hewlett-Packard Company (NYSE:HPQ)
2 1 5.506505032
1 4.997
10/07/2005 ASE Test Ltd., Camera Module Assembly Operation
Flextronics International Ltd. (NasdaqGS:FLEX)
2 1 5.209515015
1 4.997
02/13/2006 Southern Bank Bhd Bumiputra-Commerce Holdings Berhad (KLSE:COMMERZ)
1 1 4.408477405
1 5.934
02/24/2006 Amtek Marketing Services Pte. Ltd.
Pensonic Holdings Bhd (KLSE:PENSONI)
2 1 2.80140371 2 5.934
03/03/2006 American Express (Malaysia) Sdn. Bhd., Charge Card Operations and Merchant Acquiring Services
Malayan Banking Bhd (KLSE:MAYBANK)
1 1 4.380211242
1 5.934
141
03/10/2006 Spice Communications Limited (BSE:532863)
Telekom Malaysia Bhd (KLSE:TM)
2 2 4.559212156
1 5.934
03/31/2006 Productos Pelikan, S.A. of C.V.
Pelikan International Corporation Berhad (KLSE:PELIKAN)
2 1 2.633468456
1 5.934
04/03/2006 MBF Carpenters Ltd.
MBF Holdings Bhd (KLSE:MBFHLDG)
2 1 3.985965078
1 5.934
04/25/2006 PT. Surya Sawit Sejati
United Plantations Bhd (KLSE:UTDPLT)
2 1 3.829239428
1 5.934
04/25/2006 PT. Mirza Pratama Putra
United Plantations Bhd (KLSE:UTDPLT)
2 1 3.829239428
1 5.934
05/17/2006 Malakoff Bhd MMC Corporation Bhd (KLSE:MMCCORP)
1 1 3.460145817
2 5.934
07/27/2006 Linshanhao Plywood (Sarawak) Sdn Bhd
WTK Holdings Bhd (KLSE:WTK)
1 1 3.601190533
1 5.934
07/28/2006 Sucasa Sdn Bhd. The Nomad Group Bhd (KLSE:NOMAD)
1 1 2.485721426
1 5.934
142
08/04/2006 Boustead Naval Shipyard Sdn Bhd.
Boustead Holdings Bhd (KLSE:BSTEAD)
1 1 4.149680882
2 5.934
08/08/2006 Alor Setar Holiday Villa Sdn Bhd
Advance Synergy Bhd (KLSE:ASB)
1 1 3.23325001 2 5.934
08/29/2006 Malaysia Smelting Corp. Bhd (KLSE:MSC)
Straits Trading Co. Ltd. (SGX:S20)
2 2 2.638489257
1 5.934
08/31/2006 Anticor Chimie SA Scomi Group Bhd (KLSE:SCOMI)
2 1 3.212720154
1 5.934
09/12/2006 KFC Holdings Malaysia Bhd (KLSE:KFC)
QSR Brands Bhd (KLSE:QSR)
1 1 4.342422681
2 5.934
09/18/2006 Hicomobil Sdn Bhd. General Motors Corporation (NYSE:GM)
2 2 5.424881637
1 5.934
09/20/2006 Empire Deluxe Sdn Bhd
JAKS Resources Berhad (KLSE:JAKS)
1 1 2.50242712 1 5.934
09/27/2006 Bright Steel Sdn Bhd
Lion Corp. Bhd (KLSE:LIONCOR)
1 1 3.41763774 1 5.934
09/29/2006 United Plantations Bhd (KLSE:UTDPLT)
United International Enterprises Ltd. (CPSE/CPH:UIE)
2 1 3.409764104
1 5.934
143
10/16/2006 Nestle S.A., Certain Canned Liquid Milk Businesses in South East Asia
Fraser & Neave Holdings Bhd (KLSE:F&N)
2 1 3.698970004
1 5.934
10/16/2006 Premier Milk (Malaya) Sdn Bhd
Fraser & Neave Holdings Bhd (KLSE:F&N)
1 1 3.698970004
1 5.934
10/16/2006 Nestle (Thailand) Ltd., Canned Liquid Milk Production Assets
Fraser & Neave Holdings Bhd (KLSE:F&N)
2 1 3.698970004
1 5.934
10/16/2006 Nestle Dairy (Thailand) Limited, Chilled Dairy and Juice Production Assets
Fraser & Neave Holdings Bhd (KLSE:F&N)
2 1 3.698970004
1 5.934
10/18/2006 Road Builder (M) Holdings Bhd.
IJM Corp. Bhd (KLSE:IJM)
1 2 3.634880141
1 5.934
11/06/2006 PT Asuransi Aegis Indonesia
Kurnia Asia Bhd (KLSE:KURASIA)
2 2 3.268811904
1 5.934
11/13/2006 Bcom Holdings Sdn. Bhd.
Bolton Bhd (KLSE:BOLTON)
1 1 2.484299839
1 5.934
11/27/2006 Prosper Palm Oil Mill Sdn Bhd
Far East Holdings Bhd (KLSE:FAREAST); Winners Acres Sdn Bhd
1 1 2.053078443
1 5.934
144
11/27/2006 OSK Wealth Planners Sdn. Bhd.
OSK Holdings Bhd (KLSE:OSK)
1 1 3.147676324
1 5.934
11/27/2006 Sime Darby Bhd, Prior to Merger with Synergy Drive Bhd
Sime Darby Berhad (KLSE:SIME)
1 2 4.980793932
2 5.934
11/27/2006 Kumpulan Guthrie Bhd
Sime Darby Berhad (KLSE:SIME)
1 2 4.980793932
2 5.934
11/27/2006 Golden Hope Plantations Bhd
Sime Darby Berhad (KLSE:SIME)
1 2 4.980793932
2 5.934
11/27/2006 Highlands & Lowlands Bhd
Sime Darby Berhad (KLSE:SIME)
1 2 4.980793932
2 5.934
11/27/2006 Sime UEP Properties Bhd
Sime Darby Berhad (KLSE:SIME)
1 2 4.980793932
2 5.934
11/27/2006 Sime Engineering Services Bhd
Sime Darby Berhad (KLSE:SIME)
1 2 4.980793932
2 5.934
11/27/2006 Guthrie Ropel Bhd Sime Darby Berhad (KLSE:SIME)
1 2 4.980793932
2 5.934
11/27/2006 Mentakab Rubber Co. Malaya Bhd
Sime Darby Berhad (KLSE:SIME)
1 2 4.980793932
2 5.934
11/30/2006 The Right Channel Sdn Bhd
Media Prima Bhd (KLSE:MEDIA)
1 1 3.258397804
1 5.934
145
12/01/2006 E-CTAsia Technology Sdn. Bhd.
RCG Holdings Limited. (AIM:RCG)
2 1 2.526339277
1 5.934
12/01/2006 UCH Technology Sdn. Bhd.
RCG Holdings Limited. (AIM:RCG)
2 1 2.526339277
1 5.934
12/05/2006 The Palace Ventures Sdn. Bhd.
NPC Resources Bhd (KLSE:NPC)
1 1 3.110926242
1 5.934
12/07/2006 IQ Card Services Sdn Bhd
Rhythm Consolidated Bhd (KLSE:RHYTHM)
1 2 2.322219295
1 5.934
12/18/2006 Dr. W. Kolb AG Kuala Lumpur Kepong Bhd (KLSE:KLK)
2 1 4.397940009
2 5.934
12/28/2006 Engtex Ductile Iron Pipe Industry Sdn Bhd
Engtex Group Bhd (KLSE:ENGTEX)
1 1 2.655138435
2 5.934
12/29/2006 Boustead Naval Shipyard Sdn Bhd.
Boustead Holdings Bhd (KLSE:BSTEAD)
1 1 4.149680882
2 5.934
12/29/2006 Electronic Media Airtime Services Sdn Bhd
Heitech Padu Bhd (KLSE:HTPADU)
1 1 2.903089987
1 5.934
146
01/03/2007 NBG Communications Sdn Bhd
Keppel Telecommunications & Transportation Ltd. (SGX:K11)
2 1 3.0923697 1 6.327
01/10/2007 E&O Property Development Bhd
Eastern & Oriental Bhd (KLSE:E&O)
1 1 2.572871602
1 6.327
01/12/2007 Big Tree Outdoor Sdn Bhd
Media Prima Bhd (KLSE:MEDIA)
1 1 3.258397804
1 6.327
01/16/2007 P.T. Sarana Prima Multi Niaga
TSH Resources Bhd (KLSE:TSH)
2 1 3.301029996
1 6.327
01/18/2007 Everest Point Sdn. Bhd.
PJI Holdings Bhd (KLSE:PJI)
1 1 2.397940009
1 6.327
01/22/2007 Wintip Sdn. Bhd. Fitters Diversified Berhad (KLSE:FITTERS)
1 1 2.463892989
2 6.327
01/24/2007 Malaysia Transformer Manufacturing Sdn Bhd
Tenaga Nasional Bhd (KLSE:TENAGA)
1 1 4.465531557
2 6.327
01/29/2007 Alamjad Sdn Bhd. Aturmaju Resources Bhd (KLSE:ATURMJU)
1 1 2.146128036
1 6.327
147
01/30/2007 PT Proton Tracoma Motors
Proton Holdings Bhd. (KLSE:PROTON)
2 1 3.978864984
1 6.327
01/31/2007 PHN Industry Sdn Bhd
DRB-HICOM Bhd (KLSE:DRBHCOM)
1 1 4.236209654
1 6.327
02/02/2007 PT Karya Makmur Abadi
Kuala Lumpur Kepong Bhd (KLSE:KLK)
2 1 4.397940009
1 6.327
02/02/2007 PT Menteng Jaya Sawit Perdana
Kuala Lumpur Kepong Bhd (KLSE:KLK)
2 1 4.397940009
1 6.327
02/13/2007 GRE Energy Co Ltd. Evergreen Fibreboard Bhd (KLSE:EVERGRN)
2 1 3.317227349
1 6.327
02/26/2007 FEDERAL Auto Holdings Bhd
MBM Resources Bhd (KLSE:MBMR)
1 2 3.134177108
1 6.327
03/01/2007 PT Penta Valent Apex Healthcare Bhd (KLSE:AHEALTH)
2 2 2.684845362
1 6.327
03/02/2007 Excelle Timber Sdn. Bhd.
Subur Tiasa Holdings Bhd (KLSE:SUBUR)
1 1 3.338655666
1 6.327
03/06/2007 E&O - PIE Sdn Bhd Eastern & Oriental Bhd
1 1 2.572871602
2 6.327
148
(KLSE:E&O)
03/06/2007 Seal Polymer Industries Bhd
Supermax Corp. Bhd (KLSE:SUPERMX)
1 2 2.826074803
1 6.327
03/12/2007 Inorex Valve (M) Sdn Bhd
Unimech Group Bhd (KLSE:UNIMECH)
1 1 2.609594409
1 6.327
03/14/2007 Eurospiraal B.V. SAAG Consolidated (M) Bhd. (KLSE:SAAG)
2 1 2.255272505
1 6.327
03/16/2007 Wong Engineering Automation Sdn Bhd
Wong Engineering Corp. Bhd (KLSE:WONG)
1 1 2.571708832
1 6.327
03/19/2007 IJM Land Berhad (KLSE:IJMLAND)
IJM Corp. Bhd (KLSE:IJM)
1 2 3.634880141
2 6.327
03/22/2007 Jadeford International Limited
Lion Forest Industries Berhad (KLSE:LIONFIB)
2 1 3.377124042
1 6.327
03/23/2007 Ina Gail Pte Ltd Esthetics International Group Bhd (KLSE:EIG)
2 1 2.507855872
1 6.327
03/30/2007 PT Indoexchange Tbk
Integrax Bhd (KLSE:INTEGRA)
2 1 1.041392685
2 6.327
149
03/30/2007 Better Prospects Sdn Bhd.
NPC Resources Bhd (KLSE:NPC)
1 1 3.110926242
2 6.327
03/30/2007 Miracle Display Sdn Bhd.
NPC Resources Bhd (KLSE:NPC)
1 1 3.110926242
1 6.327
04/02/2007 Natuream Enviro-Services Sdn Bhd
Eastern Pacific Industrial Corp.Bhd (KLSE:EPIC)
1 1 2.46834733 1 6.327
04/02/2007 Hopematic International Sdn. Bhd.
INS Bioscience Bhd (KLSE:INSBIO)
1 1 1.892094603
1 6.327
04/02/2007 OSK Asia Capital Limited
OSK Holdings Bhd (KLSE:OSK)
2 1 3.147676324
1 6.327
04/04/2007 GTS Power Ltd. SAAG Consolidated (M) Bhd. (KLSE:SAAG)
2 1 2.255272505
1 6.327
04/05/2007 MTD Walkers PLC (COSE:KAPI-N-0000)
MTD Capital Bhd (KLSE:MTD)
2 1 2.702430536
1 6.327
04/12/2007 Ann Joo Steel Berhad
Ann Joo Resources Bhd (KLSE:ANNJOO)
1 1 2.77815125 1 6.327
04/16/2007 IDS Sebor (Sarawak) Holdings Sdn. Bhd.
Integrated Distribution Services Group
2 1 3.812913357
1 6.327
150
Ltd. (SEHK:2387)
04/16/2007 Sebor (Sabah) Sdn Bhd
Integrated Distribution Services Group Ltd. (SEHK:2387)
2 1 3.812913357
1 6.327
04/20/2007 Advanced Interconnect Technologies, Inc.
Unisem M Bhd (KLSE:UNISEM)
2 1 3.633872263
1 6.327
04/24/2007 MIHR Sdn. Bhd. The Nomad Group Bhd (KLSE:NOMAD)
1 1 2.485721426
1 6.327
04/27/2007 Circle Ring Network Sdn Bhd
EP Manufacturing Bhd (KLSE:EPMB)
1 1 2.698970004
1 6.327
04/30/2007 Mieco Smallholders Sdn Bhd
Mieco Chipboard Bhd (KLSE:MIECO)
1 1 2.964730921
1 6.327
04/30/2007 TNB Coal International Ltd
Tenaga Nasional Bhd (KLSE:TENAGA)
2 1 4.465531557
2 6.327
05/03/2007 Park May Bhd Konsortium Transnasional Bhd (KLSE:KTB)
1 2 3.435047641
1 6.327
05/03/2007 Borneo Lumber Industries Sdn Bhd
Subur Tiasa Holdings Bhd
1 1 3.338655666
1 6.327
151
(KLSE:SUBUR)
05/08/2007 AMJ Properties Sdn Bhd.
A&M Realty Bhd (KLSE:A&M)
1 1 2.88592634 1 6.327
05/08/2007 UAC Bhd (KLSE:UAC)
Boustead Holdings Bhd (KLSE:BSTEAD)
1 1 4.149680882
2 6.327
05/09/2007 Latitude Tree International Limited
Latitude Tree Holdings Bhd (KLSE:LATITUD)
2 1 3.710878618
1 6.327
05/16/2007 Abric Micromechanics Sdn. Bhd
Abric Bhd (KLSE:ABRIC)
1 2 2.376576957
1 6.327
05/16/2007 Central Mercantile Corporation (M) Sdn. Bhd
WTK Holdings Bhd (KLSE:WTK)
1 1 3.601190533
1 6.327
05/17/2007 RHB Bank Berhad RHB Capital Bhd (KLSE:RHBCAP)
1 1 4.005866602
1 6.327
05/23/2007 Meganet Communications Sdn. Bhd.
VADS Bhd (KLSE:VADS)
1 1 2.477121255
1 6.327
05/31/2007 AIC Technology Sdn. Bhd.
AIC Corp. Bhd (KLSE:AIC)
1 1 2.970346876
1 6.327
06/01/2007 Expressway Lingkaran Tengah Sdn Bhd
Plus Expressways Bhd
1 1 3.519302849
1 6.327
152
(KLSE:PLUS)
06/01/2007 Linkedua (Malaysia) Berhad
Plus Expressways Bhd (KLSE:PLUS)
1 1 3.519302849
1 6.327
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YTL E-Solutions Bhd (KLSE:YTLE)
1 1 1.903089987
2 6.327
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Online One Corporation Bhd (KLSE:ONLINE)
1 1 1.72427587 2 6.327
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OSK Holdings Bhd (KLSE:OSK)
1 1 3.147676324
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1 1 4.149680882
2 6.327
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1 1 2.053078443
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2 1 2.549003262
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1 1 2.600972896
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1 1 2.167317335
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153
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2 2 3.317227349
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1 1 3.952937668
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2 1 3.301029996
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2 2 2.736396502
1 6.327
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2 2 2.187520721
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1 2 2.745074792
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1 2 2.745074792
2 6.327
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1 1 2.745074792
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07/25/2007 RB Development IJM Land 1 1 2.74507479 2 6.327
154
Sdn. Bhd. Berhad (KLSE:IJMLAND)
2
07/31/2007 Myanmar Mamee-Double Decker Ltd
Mamee-Double Decker M Bhd (KLSE:MAMEE)
2 1 3.285332228
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07/31/2007 Mamee-Double Decker Foods (Suzhou) Co., Ltd
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2 1 3.285332228
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1 1 4.021189299
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1 1 2.730782276
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Frontken Corporation Berhad (KLSE:FRONTKN)
2 2 2.536558443
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The Nomad Group Bhd (KLSE:NOMAD)
2 1 2.485721426
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155
08/23/2007 Siam Fibreboard Co., Ltd.
Evergreen Fibreboard Bhd (KLSE:EVERGRN)
2 1 3.317227349
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2 1 4.431363764
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1 1 4.127104798
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2 1 3.061829307
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1 1 3.021602716
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2 2 3.62324929 1 6.327
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1 1 2.684845362
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1 1 3.658202253
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156
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1 1 2.555094449
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1 1 3.598899887
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1 1 2.680335513
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1 1 2.600972896
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Pan Malaysian Industries Bhd (KLSE:PMIND)
1 1 3.147676324
1 6.327
157
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1 1 2.245512668
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Sunway Holdings Berhad (KLSE:SUNWAY)
1 1 3.525563058
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AIC Corp. Bhd (KLSE:AIC)
1 3 2.970346876
1 6.327
09/19/2007 AIC Inspirasi Sdn Bhd, Brimal Holdings Sdn Bhd and Autovisor Plastics Sdn Bhd
AV Ventures Corp. Bhd (KLSE:AVENTUR)
1 2 2.403120521
1 6.327
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1 2 4.236209654
1 6.327
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1 1 2.037426498
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2 1 3.301029996
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2 2 3.363047595
1 6.327
158
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Paramount Corp. Bhd (KLSE:PARAMON)
1 1 2.992995098
1 6.327
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1 1 3.19368103 1 6.327
10/01/2007 Highline Shipping Sdn Bhd
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1 2 2.758154622
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1 3 4.980793932
2 6.327
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1 1 2.669316881
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10/02/2007 Concorde Hotel Hongkong Land Holdings Ltd. (SGX:H78)
2 2 3.022428371
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10/02/2007 Green Energy and Technology Sdn Bhd
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1 1 2.586587305
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10/03/2007 Fauzi Lim Plantation Sdn Bhd
MWE Holdings Bhd (KLSE:MWE)
1 1 3.944877306
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159
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Genting International plc (SGX:G13)
2 1 3.687172105
1 6.327
10/09/2007 Maho Engineering & Trading
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2 2 3.380211242
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10/11/2007 HLG Credit Sdn Bhd HLG Capital Bhd (KLSE:HLCAP)
1 1 2.394451681
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10/11/2007 Pansprint Consolidated Sdn. Bhd.
Milux Corporation Bhd (KLSE:MILUX)
1 1 2.678518379
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10/12/2007 Sing Guan Silk Screen (Cambodia) Co. Ltd.
Astral Supreme Bhd (KLSE:ASUPREM)
2 2 2.550228353
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10/19/2007 OSK REIT Management Sdn Bhd
OSK Holdings Bhd (KLSE:OSK)
1 1 3.147676324
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TRC Synergy Bhd (KLSE:TRC)
1 1 2.707570176
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10/24/2007 TRC Land Sdn Bhd TRC Synergy Bhd (KLSE:TRC)
1 1 2.707570176
1 6.327
160
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Maxtral Industry Bhd (KLSE:MAXTRAL)
1 1 2.522444234
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Farm's Best Bhd (KLSE:FARMBES)
1 1 4.193375081
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11/01/2007 Kemuncak Raya Sdn. Bhd.
Binaik Equity Bhd (KLSE:BINAIK)
1 2 1.69019608 1 6.327
11/01/2007 Binaik Yubina Sdn. Bhd.
Binaik Equity Bhd (KLSE:BINAIK)
1 1 1.69019608 1 6.327
11/01/2007 Maharani Properties Sdn. Bhd
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1 1 1.69019608 1 6.327
11/01/2007 Johline Realty Sdn. Bhd.
Binaik Equity Bhd (KLSE:BINAIK)
1 1 1.69019608 1 6.327
161
11/09/2007 Nepline Zenergy Sdn Bhd.
Nepline Bhd (KLSE:NEPLINE)
1 1 1.995635195
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11/12/2007 J. Gadsden (South Pacific) Limited
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2 1 3.985965078
2 6.327
11/13/2007 Sindora Bhd (KLSE:SINDORA)
Kulim Malaysia Bhd (KLSE:KULIM)
1 2 4.071108422
2 6.327
11/14/2007 Empresa (M) Sendirian Berhad
CB Industrial Product Holding Bhd (KLSE:CBIP)
1 1 2.555094449
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11/15/2007 Shanghai Jinshan Jinwei Chemical Company Ltd.
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2 1 4.397940009
2 6.327
11/16/2007 Cosmo-Jupiter Berhad
Asiatic Development Bhd (KLSE:ASIATIC)
1 1 3.755493728
2 6.327
11/16/2007 Suzhou Goodway Rubber Products Co., Ltd.
Goodway Integrated Industries Bhd (KLSE:GOODWAY)
2 1 2.619093331
1 6.327
162
11/22/2007 CMS Steel Berhad Cahya Mata Sarawak Bhd (KLSE:CMSB)
1 1 3.322219295
1 6.327
11/22/2007 K-One Resources Sdn Bhd
K-One Technology Bhd (KLSE:K1)
1 1 2.408239965
1 6.327
11/22/2007 Ampangship Marine Sdn. Bhd.
Petra Perdana Bhd (KLSE:PETRA)
1 1 3.395675785
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11/23/2007 Global Pacific Petroleum Sdn. Bhd.
Analabs Resources Bhd (KLSE:ANALABS)
1 1 2.037426498
2 6.327
12/03/2007 Cleanway Disposal Services Pte. Ltd.
Analabs Resources Bhd (KLSE:ANALABS)
2 1 2.037426498
1 6.327
12/05/2007 KUB Singgahsana Sdn. Bhd.
Eden Inc. Berhad (KLSE:EDEN)
1 1 2.737192643
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12/05/2007 KlienTec International Sdn. Bhd.
Esthetics International Group Bhd (KLSE:EIG)
1 1 2.507855872
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12/07/2007 Esteem Packaging Pte Ltd.
Century Bond Bhd (KLSE:CENBON
2 2 2.73479983 1 6.327
163
D)
12/10/2007 Vimas Joint Venture Company Limited
Berjaya Land Bhd (KLSE:BJLAND)
2 2 3.658202253
1 6.327
12/14/2007 Mesiniaga Scs Sdn. Bhd.
Mesiniaga Bhd (KLSE:MSNIAGA)
1 1 2.824776462
2 6.327
12/14/2007 Symphony BPO Solutions Sdn. Bhd.
Symphony House Bhd (KLSE:SYMPHNY)
1 3 2.399673721
1 6.327
12/18/2007 Konsortium Lebuhraya Butterworth-Kulim (KLBK) Sdn. Bhd.
Plus Expressways Bhd (KLSE:PLUS)
1 1 3.519302849
1 6.327
12/19/2007 633 Media Sdn. Bhd.
Health Management International Ltd. (SGX:588)
2 1 2.765668555
1 6.327
12/24/2007 PT Khaleda Agroprima Malindo
Metro Kajang Holdings Bhd (KLSE:METROK)
2 2 2.812244697
2 6.327
12/31/2007 Zagro Chemicals Sdn Bhd
Zagro Asia Ltd. (SGX:Z01)
2 1 1.812913357
2 6.327
164
01/03/2008 Muhibbah Engineering (Cambodia) Co., Ltd.
Muhibbah Engineering M Bhd (KLSE:MUHIBAH)
2 2 2.875061263
1 5.000
01/04/2008 PacificMas Bhd (KLSE:PACMAS)
Oversea-Chinese Banking Corp. Ltd. (SGX:O39)
2 2 4.298656617
1 5.000
01/11/2008 Victoria International College
Asia Pacific Land Bhd (KLSE:APLAND)
1 2 2.903089987
2 5.000
01/14/2008 Mahkota Medical Centre Sdn Bhd
Health Management International Ltd. (SGX:588)
2 1 2.773054693
1 5.000
01/16/2008 Fiamma Development Sdn Bhd
Fiamma Holdings Bhd (KLSE:FIAMMA)
1 1 2.356025857
2 5.000
01/17/2008 Jurus Positif Sdn. Bhd.
Mutiara Goodyear Development Bhd (KLSE:MUTIARA)
1 1 2 1 5.000
01/17/2008 CNX Solutions Sdn. Bhd.
REDtone International Bhd (KLSE:REDTONE)
1 1 2.552668216
1 5.000
165
01/30/2008 IPanel Pte. Ltd. Metronic Global Bhd (KLSE:MTRONIC)
2 2 2.330413773
1 5.000
02/06/2008 Oaksvilla Sdn Bhd Fiamma Holdings Bhd (KLSE:FIAMMA)
1 1 2.356025857
2 5.000
02/06/2008 Uniphoenix Jaya Sdn Bhd
Fiamma Holdings Bhd (KLSE:FIAMMA)
1 1 2.356025857
2 5.000
02/25/2008 Godrej Gokarna Oil Palm Limited
IJM Plantations Bhd (KLSE:IJMPLNT)
2 2 3.64738297 1 5.000
02/25/2008 Maju Warisanmas Sdn. Bhd.
Weida M Bhd (KLSE:WEIDA)
1 1 2.670245853
2 5.000
02/26/2008 TCB Reinsurance Sdn Bhd.
Tradewinds Corp. Bhd (KLSE:TWSCORP)
1 1 3.966939163
2 5.000
03/26/2008 PT Bank Internasional Indonesia (JKSE:BNII)
Malayan Banking Bhd (KLSE:MAYBANK)
2 2 4.380211242
1 5.000
03/26/2008 JPH Logging Sdn. Bhd.
Subur Tiasa Holdings Bhd (KLSE:SUBUR)
1 1 3.338655666
1 5.000
166
03/31/2008 AMBC Controls Sdn. Bhd.
AMDB Bhd. (KLSE:AMDB)
1 1 3 1 5.000
04/01/2008 Seremban Engineering Sdn Bhd
Success Transformer Corp Bhd (KLSE:SUCCESS)
1 1 2.51054501 1 5.000
04/11/2008 Symphony BPO Solutions Sdn. Bhd.
Symphony House Bhd (KLSE:SYMPHNY)
1 2 2.399673721
1 5.000
04/18/2008 Sepangar Chemical Industry Sdn Bhd
Lingui Developments Bhd. (KLSE:LINGUI)
1 2 3.77815125 2 5.000
04/23/2008 Raikon Building Management Co. Sdn Bhd
GuocoLand (Malaysia) Berhad (KLSE:GUOCO)
1 1 2.744292983
1 5.000
04/23/2008 Khee San Bhd (KLSE:KHEESAN)
London Biscuits Bhd (KLSE:LONBISC)
1 2 2.672097858
1 5.000
04/24/2008 Milan Resources Sdn Bhd
Ekovest Bhd (KLSE:EKOVEST)
1 1 1.897627091
1 5.000
167
04/28/2008 Faber Medi-Serve Sdn Bhd
Faber Group Bhd (KLSE:FABER)
1 2 3.870228279
1 5.000
05/05/2008 Tradewinds Hotels & Resorts Sdn Bhd
Tradewinds Corp. Bhd (KLSE:TWSCORP)
1 2 3.966939163
1 5.000
05/06/2008 KKB Industries (Sabah) Sdn. Bhd.
KKB Engineering Bhd (KLSE:KKB)
1 1 2.635483747
1 5.000
05/14/2008 PMB Carbon Sdn Bhd
PMB Technology Bhd (KLSE:PMBTECH)
1 1 2.301029996
1 5.000
05/16/2008 Transmission Technology Sdn Bhd
Malaysian Resources Corp. Bhd (KLSE:MRCB)
1 1 2.968015714
1 5.000
05/22/2008 Asia Pacific Trade and Expo City Sdn. Bhd.
Malaysia Pacific Corporation Berhad (KLSE:MPCORP)
1 1 1.819543936
2 5.000
05/30/2008 PT Bank Lippo Tbk PT Bank CIMB Niaga Tbk (JKSE:BNGA)
2 2 3.797752129
1 5.000
168
06/02/2008 PT Bank Lippo Tbk Bumiputra-Commerce Holdings Berhad (KLSE:COMMERZ)
2 2 4.408477405
1 5.000
06/04/2008 Manulife Asset Management (Malaysia) Sdn. Bhd.
Manulife Holdings Berhad (KLSE:MANULFE)
1 1 2.439332694
1 5.000
06/06/2008 Ranhill Utilities Bhd Ranhill Bhd (KLSE:RANHILL); Lambang Optima Sdn Bhd
1 1 3.598899887
1 5.000
06/16/2008 Symphony BPO Solutions Sdn. Bhd.
Symphony House Bhd (KLSE:SYMPHNY)
1 2 2.399673721
1 5.000
06/18/2008 Universal Building Products Sdn. Bhd.
MTD ACPI Engineering Berhad (KLSE:MTDACPI)
1 1 3.007320953
2 5.000
06/19/2008 Kurnia Insurance (Thailand) Company Limited
Kurnia Asia Bhd (KLSE:KURASIA)
2 2 3.268811904
1 5.000
06/27/2008 Malaysian Re (Dubai) Ltd.
MNRB Holdings Bhd (KLSE:MNRB)
2 1 2.773054693
1 5.000
169
06/30/2008 Spice Communications Limited (BSE:532863)
Green Acre Agro Services Private Limited; Idea Cellular Limited (BSE/NSE:532822); Telekom Malaysia Bhd (KLSE:TM)
2 2 4.559212156
1 5.000
07/01/2008 Enex-Dynamic Sdn. Bhd.
Fiamma Holdings Bhd (KLSE:FIAMMA)
1 1 2.356025857
1 5.000
07/01/2008 Anzpac Services (Australia) Pty. Limited
Tien Wah Press Holdings Bhd (KLSE:TIENWAH); New Toyo International Holdings Ltd. (SGX:N08)
2 1 2.56937391 2 5.000
07/04/2008 PT. CB Polaindo CB Industrial Product Holding Bhd (KLSE:CBIP)
2 2 2.555094449
1 5.000
07/18/2008 KDU College Sdn Bhd
Paramount Corp. Bhd (KLSE:PARAMON)
1 1 2.992995098
2 5.000
08/01/2008 Sunshine Amanjaya Sdn Bhd.
Suiwah Corp. Bhd (KLSE:SUIWAH)
1 1 3.114944416
2 5.000
170
08/04/2008 Aliran Ihsan Resources Berhad (KLSE:AIRB)
MMC Corporation Bhd (KLSE:MMCCORP)
1 1 3.460145817
2 5.000
08/05/2008 Motosikal Dan Enjin Nasional Sdn. Bhd.
DRB-HICOM Bhd (KLSE:DRBHCOM)
1 2 4.236209654
2 5.000
08/06/2008 MEG Management Sdn. Bhd.
Magnus Energy Group Ltd. (SGX:576)
2 1 2.630427875
2 5.000
08/07/2008 Beribu Ukiran Sdn. Bhd.
Karambunai Corp. Bhd (KLSE:KBUNAI)
1 1 2.978180517
1 5.000
08/08/2008 MCB Bank Ltd. (KASE:MCB)
Malayan Banking Bhd (KLSE:MAYBANK)
2 2 4.380211242
1 5.000
08/12/2008 Mushtari Engineering & Trading Sdn Bhd
Eastern Pacific Industrial Corp.Bhd (KLSE:EPIC)
1 2 2.46834733 1 5.000
171
Appendix D
Regression Analysis Results for T+60 days Post Announcement Window
Coefficients(a)
Unstandardized Coefficients
Standardized
Coefficients t Sig. Model B
Std. Error Beta B
Std. Error
(Constant) -37.205 25.393 -1.465 .144FirmSizeLog 6.136 2.523 .154 2.432 .016TypeofPayment -18.062 4.311 -.263 -4.190 .000
TypeofMerger 9.281 4.803 .122 1.932 .055
GDPGrowth 2.285 3.649 .038 .626 .532
1
Location 6.028 4.319 .088 1.396 .164a Dependent Variable: CAR Appendix E Regression Analysis Results for T+120 days Post Announcement Window
Coefficients(a)
Unstandardized Coefficients
Standardized
Coefficients t Sig. Model B
Std. Error Beta B
Std. Error
(Constant) -34.086 21.051 -1.619 .107FirmSizeLog 3.853 2.049 .122 1.880 .061TypeofPayment -10.451 3.502 -.191 -2.984 .003
TypeofMerger 5.923 3.874 .098 1.529 .128
Location 4.003 3.528 .073 1.135 .258
1
GDPGrowth 2.999 2.981 .063 1.006 .315a Dependent Variable: CAR_120
172
Appendix F Regression Analysis Results for T+180 days Post Announcement Window
Coefficients(a)
Model Unstandardized
Coefficients Standardized Coefficients t Sig.
B Std. Error Beta B
Std. Error
1 (Constant) -53.589 24.791 -2.162 .032 FirmSizeLog 5.090 2.413 .131 2.109 .036 TypeofPaym
ent -17.584 4.124 -.261 -4.263 .000
TypeofMerger 18.551 4.563 .251 4.066 .000
Location 8.674 4.154 .129 2.088 .038 GDPGrowth 2.862 3.511 .049 .815 .416
a Dependent Variable: CAR_180 Appendix G Regression Analysis Results for T+180 days Post Announcement Window without GDP Growth
Coefficients(a)
Model Unstandardized
Coefficients Standardized Coefficients t Sig.
B Std. Error Beta B
Std. Error
1 (Constant) -35.445 10.904 -3.251 .001 FirmSizeLog 5.039 2.411 .129 2.090 .038 TypeofPaym
ent -17.870 4.107 -.266 -4.352 .000
TypeofMerger 18.268 4.546 .247 4.018 .000
Location 8.571 4.150 .127 2.065 .040a Dependent Variable: CAR_180