Real estate industry takeover bid patterns: Spain, a case study

• Published in: Revista de contabilidad 2017-07, Vol.20 (2), p.225-234
• Main Authors: González-Arias, Julio, Arguedas-Sanz, Raquel, Martín-García, Rodrigo
• Format: Article
• Language: English
• Subjects: Acquisitions & mergers; Business plans; Chi; Chi-square Automatic Interaction Detector (CHAID); Decision making; Economic; Economic crisis; Economic-financial variables; Financial institutions; financial variables; financieras; International finance; Liquidity; Método de componentes principales; Ofertas públicas de adquisición de acciones; Principal components analysis; Real estate; Real estate industry; Sector inmobiliario; Sovereign debt; square Automatic Interaction Detector (CHAID); Studies; Takeover bids; Tender offers; Trends; Variables; Variables económico; Variables económico-financieras
• ISSN: 1138-4891; 1988-4672
• DOI: 10.1016/j.rcsar.2017.01.001

The upward of the Spanish real estate sector (2000–2007) caused the excessive growth of many companies mainly through acquisitions. This study aimed to identify behaviour patterns for takeover bids in the Spanish real estate industry, which was particularly hard hit by the last financial crisis. Considering that in bubble growing/burst periods, economic and financial variables are considered the most useful measures (market variables can have reliability problems), a set of 20 economic and financial variables was analysed, along with their relationship with listed companies’ participation in this type of operations over the period 2000–2012. Both acquiring and target companies were included in the 354 cases studied here. A two-stage methodology was used. Firstly, the principal component method was applied to identify the variables with greatest explanatory capacity. That was followed by the construction of a decision tree-based predictive model, more specifically a CHAID, which categorised the set of companies analysed to establish behaviour patterns. The findings of this study show that the five principal components found to afford the greatest explanatory capacity were: (a) liquidity, solvency and borrowing capacity; (b) size; (c) economic performance; (d) operating capacity; and (e) financial performance. Taken together, the first two components explained 70% of dependent variable behaviour, primarily relative to buyers. Overall, the model proposed explained on the order of 80% of dependent variable behaviour. The percentage not explained by the model was attributed essentially to strategic issues, financial speculation and private interests, among other factors present in decision-making. La tendencia alcista del sector inmobiliario español (2000-2007) provocó el crecimiento excesivo de muchas empresas, principalmente mediante adquisiciones. Esta investigación pretende identificar patrones de comportamiento para la realización de OPAs en el sector inmobiliario español, particularmente castigado por la crisis financiera. Para ello, se ha analizado un conjunto de 20 variables económico-financieras y su relación con la participación de las compañías cotizadas del sector en este tipo de operaciones, para un total de 354 casos para el periodo 2000-2012, como adquirentes y adquiridas. Para ello, se ha empleado una metodología en dos etapas. En primer lugar, se ha aplicado el Método de Componentes Principales para acotar las variables de estudio consideradas