The Determinants of Post-Merger Survival in Reverse Takeovers

Lee, June Suh; Kim, Jung Yul

Korean Journal of Financial Studies 2013;42(1):163-192.
Published online February 28, 2013.

June Suh Lee, Jung Yul Kim

우회상장 기업의 생존결정 요인에 대한 연구

이준서, 김정열

Abstract

This study examines survival determinants in reverse takeovers. By using logit regression, stepwise regression, hazard model, and Altman model, this paper analyzes the characteristics of takeover transactions, the financial characteristics of both privately held acquiring firms and of publicly traded target firms, and the first year financial ratios of listed firms through reverse takeover. We find that the survival of reverse takeovers is affected by the sales of target firms, their debt ratios, and credit scores. Survival is also affected by the sales increase ratios of the acquiring firms and by the debt ratios of the post-merger listed firms. Namely, it is observed that the survival possibility of reverse takeovers increase as the sales of target firms increase, the debt ratios of acquiring firms fall, and the credit scores and sales increase ratios of acquiring firms rise, and the debt ratios of post merger listed firms drop. This result is in line with the primary purpose of the introduction of reverse takeovers, and suggests the result be applied to the qualification examination of a reverse takeover.

Key Words: 상장폐지,생존요인,우회상장,질적심사제,Delist,hazard 모형,Hazard Model,Qualification Examination,Reverse Takeover,Survival Determinants