I BINDURA UNIVERSITY of SCIENCE EDUCATION FACULTY OF

BINDURA UNIVERSITY OF SCIENCE EDUCATION

FACULTY OF COMMERCE

DEPARTMENT OF ACCOUNTANCY

AN EXAMINATION OF POST –MERGER PERFORMANCE OF ACQUIRING FIRMS: A SURVEY OF ZIMBABWE STOCK EXCHANGE REGISTERED COMPANIES

SUBMITTED BY:

TAPIWA BUHIRA

B1232465

A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF BACHELOR OF ACCOUNTANCY HONORS DEGREE

31 OCTOBER 2015

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NAME OF AUTHOR : TAPIWA BUMHIRA

Project Title : An examination of post –merger performance of Acquiring Firms: A Survey of Zimbabwe Stock Exchange Registered Companies

Degree programme : Bachelor of Accountancy Honors Degree.

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Title: An examination of post-merger performance on acquiring firms: A survey of Zimbabwe Stock Exchange Registered Companies

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DEDICATION

To my beloved parents, you were my pillar of strength and fountain of inspiration.

ABSTRACT

The purpose of this study was to determine the extent to which mergers impact the corporate stock performance of acquiring firms listed on the Zimbabwe Stock Exchange (ZSE), and establish the identity returns on securities and the market. The researcher used the event studies, t-test and the market model to analyse data and define the significance variations in corporate stock performance, and event period used was, thirty days before and thirty days after the merger. The month of merger was considered as the window period. Data from this study was primarily collected from secondary data. The findings from this study showed that, there was a significant improvement in corporate stock performance in the post-merger period. Finally, the researcher recommended that; corporations or management should negotiate to mergers so as to enjoy benefits associated with mergers, companies should provide detailed investor information such as brief history on firms’ mergers, acquisitions and share prices on their websites, investors are recommended to study and follow economic reviews, trends and any capital market related information which will help them to respond promptly to the emergence of events that have an impact on their investments portfolios and be ready to beat the market. The ZSE was also recommended to redefine its listing necessities and make it obligatory that listed companies should follow guidelines on good corporate governance. The researcher suggested that future researchers should recall that, the market efficiency of the ZSE is questionable since the ZSE market is relatively small and still emerging, as contrasted to markets such as London Stock Exchange. And the event period (-30, 30) used was not adequate to analyse the acquiring firms’ post-merger stock performance, increasing the event period will help in obtaining detailed and solid conclusions.

Keywords: Mergers and acquisitions, Announcement, improvement, pre-and post- merger, stock, share prices

ACKNOWLEDGEMENTS

I thank the Almighty God for his guidance, protection and inspiration. I owe my indebtedness to my project supervisor Mr. N Hove, for his guidance, support and professional advice during the course of preparing the research project. Without him, this project would not have been a success. I also like to express my heartfelt appreciation to the Accounting Department lecturers, for their untiring support. My gratitude also goes to my beloved friend and brother, Never Katsande for his undying encouragement throughout this research; and my fellow colleagues, the 2016 Accountancy class. Finally, I would like to express my gratitude to my friends for the ideas exchanged with regards to the research project

TABLE OF CONTENTS RELEASE FORM ...... ii APROVAL FORM ...... iii DEDICATION ...... iv ABSTRACT ...... v ACKNOWLEDGEMENTS ...... vi LIST OF TABLES ...... x LIST OF FIGURES ...... xi LIST OF ACRONYMS ...... xii CHAPTER I ...... 1 INTRODUCTION ...... 1 1.1 Background of the study ...... 1 1.2 Problem Statement ...... 5 1.3 Research Objectives ...... 5 1.4 Research Questions ...... 5 1.5 Significance of the study ...... 6 1.6 Research Hypothesis ...... 7 1.7 Delimitations of the study ...... 7 1.8 Limitations of the study ...... 7 1.9 Summary ...... 8 CHAPTER II ...... 9 LITERATURE REVIEW ...... 9 2.0. Introduction ...... 9 2.1 Define Literature review ...... 9 2.1.2 Reason for literature review ...... 9 2.2. Merger and Takeovers Defined...... 9 2.3 Types of mergers and acquisitions ...... 10 2.4. Motives and benefits of mergers ...... 12 2.5. Market reaction and Merger announcement ...... 15 2.6. Pre-and post- merger reasons for share price discrepancy ...... 17 2.7. The Gordon Growth Model ...... 18 2.8.2 Forms of capital markets ...... 20 2.9 Measuring post-merger performance ...... 22 2.9.1 Accounting based measures, (ABM) ...... 22 2.9.2 Clinical studies ...... 23

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2.9.3 Event studies (stock-market-based measures) ...... 23 2.9.3.1 Basic approaches in Event studies ...... 24 2.9.4. Survey of executives ...... 24 2.9.5 The relationship between these measurement methods ...... 25 2.10. Empirical Evidence ...... 25 2.11 Summary ...... 31 CHAPTER III: ...... 32 RESEARCH METHODOLOGY ...... 32 3.0 Introduction...... 32 3.1 Research Design ...... 32 3.2 Market Model ...... 32 3.3 Population ...... 33 3.4 Sampling ...... 33 3.5. Data collection instruments ...... 33 3.6. Secondary ...... 34 3.7. Data presentation and Analysis ...... 34 3.8. Summary ...... 34 CHAPTER IV ...... 35 DATA PRESENTATION, ANALYSIS AND INTERPRETATIONS ...... 35 4.0 Introduction ...... 35 4.1 Data analysis and interpretation ...... 35 4.2 Zimplow and Tractive power Holdings merger-June 2012 ...... 36 4.3 CBZ and Datvest merger-June, 2005...... 38 4.3.1 CBZ (Datvest) Abnormal Returns Trend and Cumulalive Abnormal Returns June, 2005 ...... 42 4.4 CBZ and Beverly Building Society acquisition-January 2007 ...... 44 4.4.1 CBZ (Beverly) Abnormal Return and Cumulative Abnormal Returns on security-January 2007 ...... 48 4.5 Hypothesis test ...... 49 4.6 Summary ...... 51 CHAPTER V ...... 52 SUMMARY, CONCLUSION AND RECOMMENDATIONS ...... 52 5.0 Introduction ...... 52 5.1 Summary of Findings ...... 52 5.2 Conclusions ...... 53 5.3 Recommendations ...... 56 5.3.1 Investors and shareholders ...... 56 viii

5.3.2 Corporations and management...... 57 5.3.3 Zimbabwe Stock Exchange ...... 57 5.4 Suggestions for future research on the study ...... 58 5.5 Summary ...... 58 REFERENCE ...... 59 APPENDICE II ...... 68 APPENDICE III ...... 71

LIST OF TABLES

Table 1 Global merger waves ...... 2 Table 2 Summary of some of the approved merger that took place since establishment of CTC ...... 4 Table 3 Illustration showing types of merger ...... 11 Table 4 Some of the Merger or Takeovers that transpired since 2005 ...... 35 Table 5 Zimplow Holdings: Average weekly share performance ...... 37 Table 6 CBZ Holdings: Average weekly share performance ...... 41 Table 7 CBZ and Beverly acquisition: Average weekly share performance ...... 47

LIST OF FIGURES

Figure 1 An illustration showing the shift from an Efficient to a Behavioral Market Hypothesis ...... 21 Figure 2 An illustration showing a shift from an Efficient to a Behavioural Market Hypothesis...... 21 Figure 3 Zimplow Holdings share price trend before and after merger announcement...... 36 Figure 4 CBZ Holdings share price trend, pre- and post-merger period ...... 38 Figure 5 CBZ Abnormal Returns Graph ...... 42 Figure 6 CBZ Cumulative Abnormal Returns graph ...... 43 Figure 7 CBZ Holdings share price trend, in the pre- and post-merger period .. 44 Figure 8 CBZ Abnormal Returns ...... 48 Figure 9 CBZ Cumulative Abnormal returns graph ...... 48 Figure 10 Illustration of CBZ Holdings t-test null hypothesis results ...... 50 Figure 11 Illustrations of Zimplow Holdings t-test null hypothesis results ...... 51

LIST OF ACRONYMS

ABM ACCOUNTING BASED MEASURES BAT BRITISH AMERICA TOBACCO CBZ COMMERCIAL BANK OF ZIMBABWE CBZH COMMERCIAL BANK OF ZIMBABWE HOLDINGS CTC COMPETITION AND TARIFF COMMISSION EMH EFFICIENT MARKET HYPOTHESIS M&A MERGERS AND ACQUISITION RBZ RESERVE BANK OF ZIMBABWE OMIR MUTUAL IMPLIED RATE UNCAD UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT USD UNITED STATES DOLLAR ZSE ZIMBABWE STOCK EXCHANGE ZWD ZIMBABWEAN DOLLAR

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CHAPTER I

INTRODUCTION

This chapter forms the basis of the study to assess and render an examination of post- merger performance of acquiring firms at the Zimbabwe Stock Exchange and to familiarize the reader to the universal background of the study, and what the researcher aims to achieve at the end of research. More so, the researcher shall outline the problem statement, significance of the study, the research objectives and as well the delimitations and limitations of the study

1.1 Background of the study

Merger and acquisitions are of great realistic magnitude in strategic, monetary and social terms. Post-merger commercial performance has been appreciated on a wider array. Even if considerable research conduct has been encouraged over a period of half a century or more, and resulted in an extensive body of invented story from different disciplinary perspectives. The results of these efforts remain unsatisfactory in terms of trying to appreciate why so many M&A underperform; unvaried links with overall performance remain indefinable and M&A continue to show evidence of high rates of failure. This study was stimulated by the failure of stock value performance studies to agree on whether mergers generates real economic gains and to identify their sources (Gomes et al, 2013 and Palepu , Healy and Ruback, 1990).

Merger has naturally occurred in cyclical patters: periods of strong merger activity have been followed by intervening periods of fewer mergers. Five merger waves have been recognized in the history of United States, (Beechmont Crest online, 2014). This history of merger is super defined by merger waves that have been knowledgeable since the 18th up to the 1990s (Broyes, 2003). Rhodes and Viswanathan (2004) pointed that a merger wave is defined as a sequence of time periods (two or more) in which the probability of a merger occurring is above the unconditional expected probability of a merger. These merger waves are as follows;

Table 1 Global merger waves

Name Period Feature First merger wave 1893-1904 Horizontal merger

Second merger wave 1919-1929 Vertical merger Third merger wave 1955-1970 Diversified merger

Fourth merger wave 1974-1989 Congeneric merger, Hostile takeover, Corporate raiding Fifth merger wave 1993-2000 Cross-Border, mega merger

Sixth merger wave 2003-2008 Globalisation, private equity, shareholder activism

Source: York University online 2015

Alexandrids , Mavis and Travlos (2011), have propounded that there is the sixth merger wave, which became known between 2003 to late -2007 period. This merger wave has been characterized with activism and private equity. Vuong et al (2003) revealed that, the M&A industry experienced six waves of development, with latest taking place in early 2000s beginning from the established economies, specifically Japan, United States of America and European Union.

i. First Merger Wave (1893-1904), Table 1

This initial merger wave followed the depression of 1883 and about two thirds of all merger activity during the first merger wave was concentred in a handful of industries: mining, food products, petroleum products, and transportation. This merger wave encompassed many horizontal mergers, so the effected trade became extremely concentrated. For example, throughout this era J.P Morgan amalgamated U.S. Steel with Carnegie Steel and more than seven hundred small steel businesses. The subsequent mega-steel corporation controlled 70-80 percent of the steel assembly in the United States.

ii. Second Merger Wave (1919-1929), Table 1

The second merger wave began during World War I and continued until the stock market crash of October 29, 1929. Because of the heighten government watchfulness

that transpired toward the end of the initial wave, the subsequent merger wave encountered augmented government scrutiny. This merger wave was characterized by oligopolies rather than cartels and vertical merger were more, than horizontal ones.

iii. Third Merger Wave (1955-1970),Table 1

The third merger wave coincided with a period of economic prosperity in the United States. Strong economies furnished many firms with necessary resources to acquire other corporations. The third merger wave was characterized by merger among unrelated companies, also known as conglomerate merger. The horizontal merger that occurred during the third merger wave was subject to strict antitrust enforcement.

iv. Fourth Merger Wave (1974-1989),Table 1

The fourth merger wave coincided with the economic prosperity of the mid-to-late, nineteen-eighties. Even though most merger that arose during the fourth merger wave were “welcoming” this era included more antagonistic takeovers than preceding merger influences. Merger of the fourth merger wave were larger than those of earlier periods. In this merger wave, merger was financed widely by debt.

v. Fifth Merger Wave (1993-2000),Table 1

The fifth merger wave followed the economic recession of 1990-91. Large merger occurred about the same level as they had during the fourth merger wave, but aggressive takeover commotion lessened. While countless stressed longer term commercial stratagems. In this merger wave, debt financed mergers were less common than was in the third merger upsurge. Kearney (2008) revealed that there are implications to merger irrespective of the success of the merger process, most merger fail and other merger prosper. According to Weil (2010), hospital merger in Europe and North America were launched to reduce overheard, enrich delivery of health care and promote quality. Nearly all these alliances fall short, as those in governance positions lack the essential understanding of the dissimilarities in culture, values and goals of the existing amenities and neither of the hospital mergers bred cost savings nor improved the quality of care (Weil, 2010).

In Zimbabwe, merger and acquisitions are subject to examination by number of regulatory authorities to ensure that transactions are done according to the rulebook. Zimbabwean laws oblige companies entering such transactions are done to present themselves for scrutiny by the Competition and Tariff Commission of Zimbabwe (CTCZ), whose mandate is to find out if no monopolies are created through unfair competition whenever such big deals are concluded.

Table 2 Summary of some of the approved merger that took place since establishment of CTC

Merger Firms Company formed Year of merger British America tobacco (BAT) and Rothmans BAT 1999

Coca cola and Schweppes Coca –cola 2001

Dairiboard Zimbabwe and Lyons Maid Dairiboard Zimbabwe 2001

Pretoria Portland Cement (PPC) and Unicem cement Pretoria Portland 2001 Strategies Insurance and African Insurance Strategies Insurance 2001

CFX Merchant bank and Century bank CFX Holdings 2004

First bank and Zimbabwe Building Society FBC 2004

Trust Holdings, Time Bank, Royal Bank and ZABG 2005 Barbican bank Southampton Life Assurance and Founders Building Intermarket 2005 Society (FBS). Zimbank and Intermarket, ZB Holdings 2006

CBZH and Beverley Building Society CBZ Holdings 2007

Kingdom Holdings , Meikles Africa, Tanganda and Kingdom Meikles Africa 2010 Cotton Printers Kingdom Bank and AfricaAsia Bank Afrasia-Kingdom Zimbabwe 2012 limited Tractive power and Zimplow Limited Zimplow holdings 2012

TN Holdings and Pelhams Limited Lifestyle holdings 2012

TN Bank by Econet Wireless Econet Wireless 2012

Source: Newspapers (The herald (25.04.2013, 14.10.2012). The Zimbabwean (25.04.2013) and NewsDay (27.02.2013), Websites (Zimplow (2013), Lifestyle Holdings (2012), ZB financial Holdings (2012), Dairiboard (2010), RBZ (2005) and CTC (2004), Annual Reports (CBZ(2007). 1.2 Problem Statement

Zimbabwean economy had low inflows and undeniably accelerating disinvestment, motivated by a development acknowledgement by companies and societies worldwide that the political and economic immoderation in the country is debatable and economically risky. This resulted in business performance as the groundwork for share prices valuation on the stock market for investments activities. The researcher assessed the behavior of business acquisitions of defining stock prices and whether they should be considered in stock decision making. Do merger announcements and after-effects maximize or shrink shareholders wealth, focusing mainly on stock market performance?

1.3 Research Objectives

The overall objectives of the study is to determine the extent to which merger are impacting the performance of acquiring firms in the Zimbabwean economy. The following are key objectives; 1. To determine the effect of M&A on corporate stock market performance 2. To establish the relationship between merger and takeovers with share prices at the ZSE 3. To identify the impact of a change in share prices on ZSE industrial index and the return on a security.

1.4 Research Questions

1. What effect does merger and takeovers have on share prices? 5

2. What other factors other than merger and takeovers can affect prices of shares? 3. How can merger, takeovers and any other factors be improved to improve share prices performance?

1.5 Significance of the study

This study will benefit the following audience

i. The researcher

The study is undertaken in partial fulfillment of requirements of Bachelor of Accountancy (honors) Degree and will afford the researcher with the research skills for future academic and scientific researches and enhance the researcher’s undertaking in the field of accounting and finance. The researcher will also apply knowledge acquired over the years at Bindura University of Science Education in shaping practical solutions relevant to the trade.

ii. The University

Intellectual, students and members of staff will also yield from this amplified information. This acquaintance will be used for academic purpose and for auxiliary studies as literature review.

iii. Investors and shareholders

This research is anticipated to improve knowledge to investors and investments advisors on the Zimbabwe Stock Exchange, as they would know the effect of announcement of mergers and takeovers, to prices of shares. Investment analysts and stock-brokers will benefit, in that they can speculate share prices escalations after an event.

iv. Public

The entire country will benefit the perspective that, the supply of goods and services will progress as firms will be functioning at a large scale due to enhanced capitalization and post-merger performance thereby attributing to economic development. 6

1.6 Research Hypothesis

H: 0 = There is significant expansion in corporate market performance after mergers H: 1 = There is no significant expansion in market corporate performance after mergers

1.7 Delimitations of the study

The research will be limited to the Zimbabwean stock market and concentrated on the reaction of share prices in response to mergers. Only successful merger will be analyzed or whose merged firm is active on the ZSE. The effect of other factors that affect share prices, such as dividends payment-announcement or seasonal effects are left out so as to make an in-depth analysis into that area. The month in which a merger announcement has been made, will be taken as the window period thirty days prior and after the event (-30, 30). The study is restricted to the years ranging 2005 to 2014.

1.8 Limitations of the study

It is authoritative to inform any reader of the piece of work of the analysis. The quality of the research is likely to be shortened by the source of information; since this study was undertaken using secondary data only. Secondary data might not be suitable as it may lack relevance. The data has been collected for other purposes rather than the study at hand. The following are limitations faced by the researcher in this study:

 The daily industrial indices could not be obtained, therefore the researcher had to resort to week ending industrial indices that could be obtained from ZSE and RBZ weekly and monthly economic reviews. However, some of the industrial indices were not available for instance the December 2006, only the year ending index was obtained. Therefore in depth analysis of CBZ and Beverly merger could not be executed on computing return on market.

 Some firms and banks that merged could not be assessed as there were inadequate share prices, for the study of such firms. From the information derived from ZSE, FBC Holdings had pre-merger share quotes but no post- merger share quotes could be found on the capital market, therefore the post-

merger performance could not be evaluated. ZB Financial Holdings merged in 2006, and in that year the bank was delisted from ZSE and no share prices could be obtained from ZSE and FBC brokers.

 Some recent mergers and acquisitions that would have been assessed in this study could not be taken as part of the study since the merging companies are not listed on ZSE. These firms include the merger between Engen Zimbabwe and Chevron Zimbabwe in 2011, acquisition of Sai Enterprice and Chrissfontein Marketing by Choppies Zimbabwe in 2015, takeover of Lobels by Takura Capital 2015, acquisition of Alro Transport by J&J Transport 2015, and Du Point Pioneer acquires Pannar Seeds 2015.

 The research was done involving two currencies, the ZWD and USD, especially on the computations of abnormal returns (AR) and cumulative abnormal returns (CAR) and market model components and graphical presentations. On graphical presentations and data analysis the USD was used since the ZWD was converted using Old Mutual implied rates and governed exchange rates, but on computations of ARs, CARs and betas and alphas, the ZWD was used as the treasury bill rates and industrial indices derived from RBZ and ZSE were solely directed for the ZWD not USD currency.  The conversion of the ZWD to USD resulted in some meaningless share prices being obtained due to inflation, price ceilings, RBZ monetary controls to mention a few, and the researcher had to multiply such share values with figures such 100 000, so as to obtain reasonable share quotes to enable post- merger performance of acquiring firms. These firms include CBZ in 2005 and 2007.

1.9 Summary

The chapter looked at the background information, research problem, research objectives and research questions and as well the global and local scene of the merger cases and the occurrences of merger waves. Also provided in this chapter is the significance of the study, limitations as well as the delimitations. The following chapter explores the related literature that other intellectual have yielded concerning the topic under review. 8

CHAPTER II

LITERATURE REVIEW

2.0. Introduction

This chapter highlights several contributions by dissimilar authors on the linked study. The main aim of this chapter is to analyze and bring out the literature from different authors relating to the theme of research. It seeks to come back with the various questions that are being asked regarding the post-merger performance of acquiring firms.

2.1 Define Literature review

A literature review is an evaluative description of studies bring into being in the writing connected to your chosen area thus according to Wegner, (1993)

2.1.2 Reason for literature review

Wegner, (1993), clearly provide reasons for literature review as follows:

 To obtain information of what other researchers had found so as to outwit the chances of replicating studies which had been done earlier.

 Define the boundaries of the research field

 Gives room for comparison with earlier studies

2.2. Merger and Takeovers Defined

Mergers and Acquisitions (M&A) refers to the characteristic of commercial approach, investment and super mental picture commerce with the trade and merging of varied companies that can profit, finance, or help a growing company in a given industry develop fast without having to form another business entity (Khan, Kayani and Javid, 2011). According to Trivedi, Desai and Joshi (2013), a takeover is quietly different from an acquisition. When the acquisition is obligatory in nature and without the motivation of the aimed corporation’s administration it is

accepted as a takeover. The authors noted that, takeovers generally undergoes the route whereby the acquiring company directly approaches the minority shareholders through an open tender offer to buy their shares without the permission of the target company’s management. In M&A circumstances the terms merger, acquisition, takeover, consolidation and amalgamation are used interchangeably (Chandra, 2001 cited in Trivedi, Desai and Joshi, 2013).

According to Fearns (2003), growth may take place by a merger where two or more firms agree to merge together. He further went on to highlight that a takeover is where one firm, cannot inevitably with the say-so of other, gains a controlling interest. This is possible because shares can be freely bought and sold on the stock market (Gaughan, 2012). Highlighted that a takeover or merger have a contact on the broad- spectrum operation of the firm. Accordingly a firm is anticipated to modify its operations for good in most instances. Amalgamations are believed to affix value to firms through reduced risks accompanied by increased returns. This force many investors to want to increase their venture in the firm (Gaughan, 2012). Baines (2003) also noted that takeovers and mergers have an impact on the share prices. Baines carried out a research of five mergers and takeovers that took places in the USA. His conclusions evidently showed that there was an overreaction of stock prices after such events. He then went on to put together a model that showed a positive relationship between stock prices and integration of firms.

2.3 Types of mergers and acquisitions

Peavler (2013) classified takeovers and mergers into horizontal, vertical upward and vertical backward integration. Buckley and Ghauri (2002) support the convectional classification of mergers into those three groups, as; 1. Horizontal mergers and acquisitions between competing firms in the same industry; 2. Vertical mergers and acquisitions, between firms in trade and value chain links; and 3. Conglomerate mergers and acquisitions, where companies are unrelated businesses.

Peavler (2013) He defines horizontal integration as the one that took place when firms at the same stage of production combine together under the same management. In case of Zimbabwe the following companies are good example of horizontal merger that become known in the late 1990s, these include the merger between, Zimnat and Lion Insurance companies in 1999 and the one between First Merchant bank and Heritage investment bank in 1997. He further went on to define vertical integration as the amalgamation of firms in the same industry but at different stages of production. This may take place either backward towards the source of the raw materials or forward towards the market. Magaisa, (2005) defined the difference horizontal and vertical mergers as slight sometimes, and illustrated the takeover of the struggling Universal Merchant Bank by CFX in 2002, as an example.

Magaisa (2005) highlighted that corporation mergers involves the “marriage of companies” in unrelated trades. He cited that, the desire of this merger is to distinguish the firm’s events and spread risk by embarking in a number of economic events. Conglomerate mergers result in major reward achieved by the merging firms since they are the best ever means of way in into diverse activity grounds in the shortest promising time duration. Furthermore, they trim down the financial risks by “not putting all the eggs in one basket” (Gaughan, 2007). In Zimbabwe such mergers were common during the era of the closed economic systems, post-UDI and pre-ESAP hence the emergence of such conglomerates such as; TA Holdings in 1964, LonRho in 1961, Anglo-American Corporation on 24 May, 1999 and Delta Corporation in 1978.

However, Kearney (2008), in their study “Not all mergers are alike”, every merger is different. They differ according to size and most importantly, their objectives and scope of integration and this argues to the views of Peavler (2013) and Buckley and Ghauri (2002 grouped mergers into three basically forms that is horizontal, vertical and conglomerate mergers. Kearney (2008) grouped mergers into seven types from an analysis of 175 mergers, namely;

Table 3 Illustration showing types of merger

Merger type Description Volume extension Horizontal integration of direct competitors to improve market share and

accomplish economies of scale. Regional extension Horizontal integration of companies in identical industry, but serving different regions. Merging companies want to achieve quick right to use to new geographic sectors and local awareness or to increase global market share.

Product extension Horizontal integration of non-competitors that supply the similar customers with allied products and services. The intention is to balance the portfolio and cross-sell products and services, and is regularly driven by economies of scale upstream in sales and marketing.

Competency extension Partial horizontal integration of companies that commonly were not competitors, and where aim focused on one part of acquirer’s value chain (often marketing, distribution or R&D).Acquirer gains access to key knowledge and technologies to strengthen core competencies and increase customer value.

Forward extension Vertical integration of downstream suppliers or vendors to get hold of additional market sections and, potentially, end customers.

Backward extension Vertical integration of upstream suppliers or vendors to protect strategic resources or take advantage of the dwindling power of the supply market.

Business extension Merger between unrelated businesses to enter into attractive new markets and diversify business, reduce risk, or transfer brand, strategic and managerial skills.

Source: Kearney Analysis, 2008

2.4. Motives and benefits of mergers

Even if the motives in the wake of M & As are difficult and there problem of categorization, the primary issue in all these motives is the idea of synergy. In bodily sciences, synergy refers to the kinds of feedbacks that take place when two matters merge to bring into being a greater outcome as one than what the sums of the two working separately account for. Merely known, synergy refers to the phenomenon of 2+2=5 (Coyle, 2000). In M&A background, synergy translates into the capability of a business amalgamation to be more flourishing than the sum of the individual

achievements of the two separate firms. That is, the combined firm is value more than its parts. The explanation for this incidence is that typically the firms were not performing up to their probable preceding to integration or that benefits were attained by the merger. Following this reason, companies are encouraged to involve in M & As in direct forming synergies (Coyle, 2000).

A collective company can neat down its fixed cost and so can cut cost of production and can profit with economies of scale and geographical diversity. Erel et al (2012) advocated that a cost effective firm can obtain a loss making firm, to expand from the acquired firm’s losses, which reduces their tax liability. If the buyer is purchasing a competitor from the market it will definitely decrease the competition and add to the market power of the buyer and results in the increase of revenue and market share of the buyer. Shaheen, 2006, He added that buyers and sellers expect to reimbursement as a result of such acquisitions and pointed that when companies are acquired , the trader’s owner are naturally trying to superior market share and branch out their portfolios or amplify liquidity. Arora (2013) suggested that a number of firms have been competitive advantage and improving firm’s value, by taking advantage of moderate business risk.

Growth is driven by the need to reduce cost, enjoy economies of scale, attain technology for strategic gain, diversification, arrive at global size, enhance marketing operations and to create capital gains for shareholders (Erdogan 2012; Pandey 2010; Sinha et al 2010). Pandey 2010, noted that firms get involved in M&A with varying motives such as to; perimeter competition, make use of the under-utilized market power, overwhelm the inconsiderate of slow growth and liability in one’s own industry, bring about diversification of trade and increase earnings proportionately less investments, initiate multinational frontline without excessive start-up cost to gain access to a foreign market and get around government regulations. Pandey (2010), based on the empirical evidence and the experiences of certain companies, he explained the motives and advantages of mergers and acquisitions as follows;

 Maintaining or accelerating a firm’s growth, mostly when the internal is constrained due to scarcity of resources

 Enhancing productivity through cost reduction resulting from economies of scale operating competence and synergy  Reduce tax obligation because of the provision of setting-off accrued losses and unabsorbed depreciation of one company against the profit of another.  Diversifying company risk, particularly when it acquires those industries whose income streams are not connected.  Restraining the severity of rival by increase the company’s market power.

Requirements and government policies such as capital levels, regulations, quotas and tariffs have resulted in companies merging to call together the prerequisites. For example the banking sector in Zimbabwe, companies are enjoined to meet certain capital and liquidity requirements. ZB bank merged the ZB building society and ZB bank (AMERIZIM, 2012) and the First Bank merged with the First Bank Building society in pursues of increasing their capital and meet the minimum capital requirements (herald, 02/08/2012). Merger and acquisitions often lead to an increased value generation for the firm. It is probable that the shareholder value of a firm after mergers or acquisitions would be greater than the sum of the investor values of the parent corporation. M&As commonly do well in generating cost efficiency and helpful gains through economies of scale , that target firm’s shareholders profit, and bidding firm stockholders do not drop (Finance Maps the World , 2013).

Managerial Motives: A manager’s drive for merger is frequently to boost the acquirer’s leading position in the market and to protect active market points. Managers themselves may also be paying attention in M&As owing to esteem, which is beyond measure but definitely greater in a larger firm (Brouthers, van Hastenburg and van den Ven, 1998). In order to attain the beyond objectives, corporations are more and more drawn in M&A deeds such that in 2004 alone nearly 15,000 deals were accomplished at a value of $1.9 in all over the world. Of this, 5765 and 6218 deals at values of $498.57 billion and $357.62 were recognized in US and Europe respectively. Merger activities are accepted to be even more widespread for the organizations all around the world. According to the study carried out by Earnest & Young in 2004, the managers and owners of the biggest 250 companies anticipates

that M&A actions will enhance significantly in the next five years (Earnest &Young, 2004).

2.5. Market reaction and Merger announcement

Baker, Pan and Wergler (2012) and Shaheen (2006), in their research on stock market response noted that merger and acquisitions in the stock market cause investors to modify hopes about the company’s future profitability. Accessibility of any information signifying that a stock is under-priced, which offers a profit prospect, business enterprise capitalist get together to obtain stocks and right away bid up the price to rational levels provided all available information, prices must increase or diminish merely in response to new information (Sunde and Zvinamoyo,2008).Meknassi (2010) taken as a whole, study report gloomy abnormal returns to the acquire around the publication date, and provide several explanations for this observable fact. Baker (2009), on growth opportunities, gloomy abnormal returns could come into sight from acquisitions announcements, as they hint that acquirers have worn out their internal growth chances.

The acquiring firm is more likely to overpay for the target, consequently causing a negative market reaction at the publication (Maknassi, 2010). Capital markets act in response to a variety of corporate announcements, such as mergers and at the minute a merger is affirmed, securities markets competitors act in response with information they have at the hand and as time passes, they can advance in securing more information (Federal Reserve Bank of Boston, 2013). This shows that market share prices react quickly with market information concerning to merger and acquisitions. Experiential finding is that prices do act in response to information of mergers and takeovers. The Increasing Abnormal Returns methodology for testing for semi-strong efficiency for takeover and mergers publications was initiated by Jensen and Ruback (1983). When new information is released, it is fully built-in into the price rather at the appointed time .The availability of intraday data enabled tests, which offer evidence of public information impacting stock prices within minutes (Patell and Wolfson, 1984,)

According to Reserve Bank of India (2007), spreading of market information on a real time basis, without presentation identity of market participants, constricts bid-ask spread and rallies market liquidity. Owes and Alexander (2011), indicates that markets at once react to the announcements of M&As and the stock price jumps just about to the value of the deal per share, for the target firm. In their sample of large media M&A, there was a premium of approximately 15% over three days surrounding the announcement, not including the increase caused by market speculation or insider trading leading up to the announcement. They linked the acquiring company shareholders, to abruptly become owners of the new, large company, at a considerable cost in terms of having to “overpay” to make the acquisition. The authors also revealed, that, “the value of acquiring firms decreased approximately to four percent (4%) comparative to the market.

Additional made-up story (Baines, 2003), specified that mergers and takeovers, have a force on the market stock prices. Basing on five mergers and acquisition that become known in USA, his results summarized that there was an overreaction of stock prices after such events. Then, he invented a model that shows a confident relationship between stock prices and amalgamation of firms. On the other hand, Mitchell, Pulvino and Stafford (2004), scrutinized the trading performance of professional shareholders around 2,130 mergers acknowledged between 1994 and 2000. They establish considerable support for the continued existence of price demands around mergers caused by unaware shifts in excess demand, though such effects are short-term, constant with the concept that short-run demand curves for stocks are not perfectly elastic.

Wong and Cheung (2009), well thought-out the effects of means of payment, form of acquisition and type of offer on target firms’ abnormal returns around the takeover publication. They showed that there was no distinction in premiums between stock and cash offers (Suk and Sung, 1997 cited in Wong and Cheung, 2009). Chang (1998) examined bidder returns at the declaration of a takeover proposal when target firms were privately held. He indicated that bidders experienced no abnormal return in cash offers but a positive abnormal return in stock offers. The monitoring activities and information asymmetries were reasons for a positive wealth effect. Knapp (2006)

concluded that post-merger abnormal return of bank related companies was significantly larger as compared with the industry mean in the first 5 years after a merger. Al-Sharkas et al (2008) showed that mergers could improve the cost and profit efficiencies of banks and provided an economic rationale for future mergers in the banking industry. Fuller, Netter and Stegemoller (2001). They argued that shareholders earn about an average zero abnormal return at the announcement of acquisitions, regardless of tremendous variation in returns.

2.6. Pre-and post- merger reasons for share price discrepancy

Wong and Cheung (2009) proposed that, the changes in shares preceding to the announcements or after announcements might be due the information outflow to the markets, profit performance of companies involved, or procuring prices which may vary from market expectation. They added that, evidence on the significantly positive changes of abnormal returns suggests that the shareholders of bidding firms support M&A deals as they expect future efficiency of the merger and thus gain from M&A activity. Most bidding firms in various economic they enjoy a positive cumulative average abnormal return (CAAR) because stock investors overestimate the bidding firms on the future efficiency of the target firms on the merger.

A simple discount model shows that the essential value of corporate stock equals the present value of expected future dividends. The future dividends must eventually reflect actual economic motion. If all currently existing information is taken into account, there might be a close relationship between stock prices and expected future economic activity (Kumar and Puja, 2012). The Gordon growth model, enlighten mostly on the stock price variations (increases and decreases) and outlines possible factors affecting stock prices value. It assumes that the dividend grows at a constant rate in perpetuity and at any point in time, the model answers for the present value of the infinite series of future dividends. Generally, present and prospective investors are keener to hold or acquire stocks, awaiting better returns either as capital appreciation (increase in stock value) or dividends.

Gordon pointed that, a firm that at present have higher earnings growth, has a greater capability to pay upcoming dividends which is likely to attract investors to embrace more of the firm’s stocks. Bearing in mind, synergies and economies of scale benefits which come out from mergers and acquisitions, Gordon related such events to enhance firm’s earnings. Hill (2009) discusses the work of Gordon (1962), who indicated that most real-world markets participants are still rational-risk averse investors who guarantee to ‘bird in hand’ values. Some shareholders favour to be paid extra dividends now than later, regardless of the profitability of future retentions than their current capitalization rate (r>Ke). Accordingly, near dividends are valued more highly. Investors discount current dividends at a lower rate than future dividends (Ke10) from firms that retain a greater proportion of their earnings. The unavoidable connotation of this risk-return trade –off is that share price will fall because equity values are;

 Positively allied to the dividend pay-out ratio  Inversely allied to dividend cover  Inversely linked to the retention rate  Inversely allied to the dividend growth rate. 2.7. The Gordon Growth Model

The Gordon growth model relates the value of a share to its expected dividends in the subsequent time period, the expected dividends growth rate and cost of equity. The Formula:

D1 V K  g o = e

Where:

Vo = fair value of a share

D1 = dividend to be paid at the end of period 1

K e = cost of equity g = dividend growth which is also equal to earnings growth. Source: Damodaran, (2001)

Damodaran (2001) objected that this models’ use is limited to firms that are growing at a constant rate, meaning some firms at developed and declining stages may not make use of it. He disapproved the hypothesis that the growth rate in dividends has to be constant over time, stating that it is a difficult concept to meet, above all given the irresponsibility of earnings. Damodaran further supported his views by illustrating that, the model can be used with little real effect on value if a firm has an average growth rate that is close to an even growth rate. 2.8. Capital market theory

The growth of the market for merger and acquisitions has gone hand in hand with the rise of world security walkways (Antoniou, Arbour and Zhao, 2011). Present-day capital market system is fixed on three normative concepts that are also realistic because they were accepted without observed fundamentals (Hill, 2009). These theories constitute; rational investors, efficient markets and random walks.

2.8.1 Efficient Market Hypothesis

Fama (1970), formulated the Efficient Market Hypothesis (EMH) which is the commonly accepted model underlying the efficiency of capital markets. According to Hill, (2009), Fama (1965) irrespective of market efficiency explained how;

 Present share prices replicate all the data used by the market

 Share prices only change when new information becomes available.

Mensah, Berko and Adom (2012), cited that the EMH suggests that a market is efficient when it is able to adjust directly to take account of all on hand information, such that no scrupulous agent in the market obtains more information than the information that is by now reflected in the market prices (Sunde and Zvinamoyo, 2008 and Osei, 1998). Thus with a specified set of information , market efficiency results, if it is unfeasible for any agent to make economic profits by trading on the basis of this information set since all agents in the market are privy to the same information (Frimpong, 2006). Recently, Hede (2012) revealed that EMH assumes excess return opportunities to be unpredictable and that it does not suggest that prices levels are random. He further highlighted that, prices are the fair valuations of the firm based on the information available to the market concerning the action of management and the firm’s investment and financing choices.

Discussing the views of Ball (1996) and Nielsen (2012) argued that the theory of efficient markets is an deficiency and restricted way of viewing capital markets as the narrow theories of finance on which the Efficient Markets Hypothesis is based, widely ignores the human nature of the participants that constitute the capital market and especially these three groups of opinion-formers;  Company management  Sell-side analyst  The fund management function The EMH is linked to the random walk hypothesis, which is a proposition used in corporate finance to describe a price series, where all successive prices changes symbolize random departures from preceding prices. Lo and MacKinlay (1999) identified the logic behind the random walk hypothesis, and cited that if the course of information is unconstrained and information is straight away reproduced in stock prices, then tomorrow’s price discrepancy will make public only tomorrow’s news and will be self-determining of the price changes today. News is volatile and as a result, price changes must be impulsive and unsystematic, that even in the dark investors buying a diversified portfolio on the market will obtain a rate of return as helpful as that attained by specialists.

2.8.2 Forms of capital markets

Ross (2008) identified three forms of the Efficient Market hypothesis, which are; the Weak form, the Semi-Strong form, and the Strong form. Further research (Smith, 2008), outlined that information is a vital factor in the efficient market hypothesis, which leads directly and seamlessly to the ensuing investment decisions. Decisions cited ranged from buying, selling, issuing, or continuing to hold the securities. Smith (2008) suggested the market price to be determined in the usual way, as represented by the intersection of the demand and supply curves. He further clarified that; decisions to buy shift the demand curve out, raising the market price and decisions to sell or to issue more of the security shift the supply curve out, lowering the price. Smith (2008) consented with the views of Lo and MacKinlay (1999), suggesting that the absence of barriers to the market-clearing outcome, such as price controls, the resultant price fully reflects the on hand information. The only behaviour in the model is profit maximization. Implicitly, buyers and sellers can and do make correct

decisions to optimize their expected rate of return (or cost of funds for the issuers) given the assessed level of risk. The Tradition Exposition of the Efficient Markets Hypothesis

Information Decisions Demand/Supply

History Prices Buy, Sell/issue, Hold Determine Market

Prices Public Information Private Information

Price supply

Market price

Demand

Quantity

Figure 1 An illustration showing the shift from an Efficient to a Behavioral Market Hypothesis Source: Smith, (2008)

The Behavioural Finance Perspective

Information Information Decisions Demand/Supply Processing Processing

Price Supply

Higher market price

Lower market price Demand

Quantity Figure 2 An illustration showing a shift from an Efficient to a Behavioural Market Hypothesis.

Source: Smith, (2008)

Figure 2, demonstrates the price determination sequence from the viewpoint of behavioural finance. An additional box is placed between available information and the investment decisions. The relevant information, be it historical price charts, accounting ratios, or corporate takeover plans, unavoidably is processed by human beings who are subject to the various psychological biases that are studied in the behavioural finance literature. Flaws in the processing impact the buy, hold, and sell/issue decisions, thereby affecting the market price. That price could be higher or lower. Corporate stock market price is determined two variables which are demand and supply (Smith, 2008).

2.9 Measuring post-merger performance

The impressive growth of mergers has reasonably inspired an analysis whether such high point deals are worth happenings (Antoniou and Zhao, 2011). It is to all intents and purposes important to weigh up the consequences of mergers and acquisitions, the dispute lesson the traditions of measuring the acquirer’s post-merger performance. According to Hoom (2011), post-merger performances can be assessed by considering the meaning of M&As (Bruner, 2004 cited in Hoom and Hoom, 2011). Discussing merger performance, Hoom and Hoom (2011) suggested that capital formation can be assumed as a very important measure of firm performance and primarily from the standpoint of a firm’s shareholders. Four ways have been recognized to measure post- merger helpfulness. According to Bruner (2004), these constitutes; accounting studies, clinical studies, event studies and survey of executives.

2.9.1 Accounting based measures, (ABM)

Kaplan (2006) suggest that, this measurement tool utilize the use of operating margins as accounting based measure and total factor productivity as productivity based measures, so as to appraise acquisition accomplishments. The underlying principle at the back of these studies is that the planned aim of a business is to earn a reasonable return on capital, and any gain arising from takeovers will finally revealed in the

firm’s accounting statements (Tuch and O’Sullivan, 2007). Accounting measures have a broad logic, such as profitability, employing earning-based measures and cash flow performance measures (Healy et al., 1992), productivity (Bertrand and Zitouna, 2008), improvement indicators (Bertrand, 2009), growth rate of sales, or assets (Gugler et al., 2003). A wide range of accounting ratios in M&A performance evaluation can be found in Martynova and Renneboog’ (2008) research. Return on assets (ROA) is widely used in the M&A creative writing (Bertrand and Betschinger. 2011). Meeks (1981) weigh against profit/sales ratio, return on equity (ROE) and ROA and concluded that ROA is the most suitable ratio for measuring M&A performance. Wang and Moini (2012), are of related views, they connected ABM with accounting measures such as assessment of, free-cash-flows and ratios, in prior and afterwards on period following a merger. Recently, Mahesh and Prasad (2012) noted that a firm can weigh up its performance on its own over time or weigh against itself to competitors in their personal sectors, using financial performance metrics which give a comparative source for evaluation and measurement. Wang and Moinu (2012) outlined that; ABM captured grasped returns, is simpler to put into practice and effects of multiple motives can be covered though, it reflects the past rather than the present performance anticipation. This shows the implications of using ABM as a measure of performance. 2.9.2 Clinical studies

These studies provide an in-depth event analysis, using case studies or very small samples to assess the impact of an event (Kaplan, 2006). Further made-up story (Kaplan, Mitchell and Wruck, 2000) reviews that quantitative and qualitative modus operandi are used in clinical studies.

2.9.3 Event studies (stock-market-based measures)

These studies initiates from the EMH, using especially the semi-strong form, security prices are said to disclose all information efficiency in the valuation of securities, estimating and drawing inferences around an event in a certain time (Hurschey and Nofsinger, 2008 and Serra, 2002). According to Beverley (2007), event studies attempts to measure the effect of an event on the value of firms by observing stock markets statistics. Thus the effect of an event is reflected almost immediately in asset

values. Classic events comprise divestitures, change in management and mergers. It is intended to weigh up whether there is an “abnormal” stock price outcome related with an unexpected event (M&As), which embraces that stock returns reveal quick, fair, reasonable, and risk-adjusted outlook of the worth of the firm in approaching phase based on the coming of new information. The researcher generally describes a phase (event window) over which the impact of the event will be measured. It can be classified into short-term and long-term event study. Ex-ante analysis which can be represented by short term events, which might in belief help to forecast the future profitability, given that financial markets are made-up to be modern. On the other hand long–term event study, is considered on the concern that stock price cannot at once capture the result of this event as some reservations can be get rid of as M&A progression going on. Mutually have their pros and cons, no matter what, the theory is used they try to estimate the acquiring firm’s success or failure in value capture for its shareholders from M&As.

2.9.3.1 Basic approaches in Event studies

Central to event studies is the measurement of Abnormal Returns (ARs). A return on the security, are calculated as the sum of the daily/monthly/yearly ARs within an event window across from some days/months/years before and after the merger event, hence, data is not subject to trade sensitivity, enabling a cross-section of firms to be considered. The AR is compared with the security’s price before the announcement of the event in order to show effects of the event. ARs are equal to actual returns minus the expected returns (yardsticks) on the stock conditioned that the event does not take place (Wang and Moini 2012 and Broyles 2003). Measures made on the event study method vary in terms of the length of the market portfolio yardstick used, the event window, and allowance for stability of firm-specific betas and the method of computing ARs (Cording et al., 2010).

2.9.4. Survey of executives

Wang and Moini (2012), suggest that executives are questioned in rating the extent to which primary objectives would have been realized, several years after finishing point of M&As in difference to initial objectives using non-financial and financial ratios or

both. Survey of executives depends exclusively on managerial ability to presume objective judgements, however survey of executives suffers managerial bias and differences in accounting bases employed in firms and multiple respondents are needed (Wang and Moini (2012) and Papadakis and Thanos, (2010)).

2.9.5 The relationship between these measurement methods

The above methods of measuring merger effects, indicates that different metrics lean- to light on different characteristic of difficult acquisition activities, and they can counteract each other’s fault, (Wang and Moini, 2012). At hand are adaptable disputes, connected with methods of measuring post-mergers performance, in determining a yardstick (Sudarsanam, 1995).According to Morgan (2013) a yardstick is a paradigm, usually an unmanaged index, used for practical reasons in assessing performance of a portfolio or mutual fund. Wang and Moini (2012) noted that, the Market model, Market-adjusted model, Capital Asset Pricing Model (CAPM) and the Fama-French Three-factor model are most universal yardsticks. The ZSE uses two indices which are; the industrial index and the mining index as yardsticks, for measuring shares or portfolios performance (Sunde and Zvinamoyo, 2008). Kane , Bodie and Marcus (2008) points that, “small errors in choosing a yardstick against which to appraise returns can cumulate to large noticeable abnormalities in continuing returns”. As a consequence failure to obtain applicable yardstick draws distorted results. One should opt for a yardstick that most closely matches the desired performance and that yardstick should be broadly based with as many constituents as possible, so as to reduce risk and deduce reasonable evaluation. Normally, a more broadly based yardstick is better because it is more diversified and the returns will be less influenced by the poor performance of a single security (Personal Finance, 2013 and Brigham and Ehardt, 2010).

2.10. Empirical Evidence

Firth, (1979). The profitability of takeovers and mergers. The Economic Journal, 89, 316-328. Firth (1979) watches merger and takeover movement in the UK especially, the effect of takeovers on shareholder returns and administration advantages was investigated,

and a few recommendations for the association's hypothesis are drawn from the outcomes. The study demonstrated that mergers and takeovers brought about payback to the gained firms' shareholders and to the procuring organizations' manager, however that misfortunes were endured by the getting organizations' shareholders. The outcomes were consistent with takeovers being persuaded more by boost of administration accommodation reasons, than by the augmentation of shareholder wealth.

Agrawal, Jaffe, & Mandelker, (1992). The Post-Merger Performance of Acquiring Firms: A Re-Examination of an Anomaly. Journal of Finance 47, 1605-1621. They built up a bigger sample of 937 mergers and 227 tender offers. They discover negative and noteworthy strange returns for 937 mergers over the five year period, and positive however of no outcome unusual returns for 227 tender offers. This contradicts to the findings of Fuller, Netter and Stegemoller (2001). They argued that shareholders earn about an average zero abnormal return at the announcement of acquisitions, regardless of tremendous variation in returns. They utilized information investigation technique for recorded information. They balanced for size impact and for beta-weighted market returns. They found that shareholders of obtaining firms qualified a wealth loss of around 10% over the five years taking after the merger finishing

Leapsa et al. (2012) “Post-merger financial performance” A Study with reference to Select Manufacturing Companies in India. This study endeavored to figure out the distinction in post - performance compared and pre-merger as far as benefit, liquidity and dissolvability. The study's likelihood is restricted to assembling part organizations in India. The measurable tools utilized are descriptive measurements, paired sample t-test. Rundown and Concluding Remarks The liquidity position of the companies has improved but it is not statistically significant. The finding is similar to Pawaskar (2001). The solvency position in terms of networking capital/sales has decreased, but it is not statistically significant. Kumar Raj (2009) has also found that the solvency position of companies reduces after merger. The obligation (debt) ratio has expanded yet alongside it the interest scope ratio has expanded. The profitability position of the companies has increased in terms

of return on capital employed and decreased in terms of return on net worth. Be that as it may, the good thing is that the increment has been statistically significant and decrease has been statistically insignificant. The financial performance of the companies’ improved after merger in terms of current ratio, quick ratio, return on capital employed, interest coverage ratio. But most of the results are not statistically significant. In their decisions expressed that, the future extent of study is to analyze the performance of organizations taking the organizations included in merger exercises and the organizations without the merger arrangements. Study can likewise be stretched out to the instances of acquisitions.

Pazarskis, (2008). Exploration of Mergers and Acquisitions of Greek Firms with the Application of Statistical Methods. University of Macedonia, Thessaloniki, Greece 80 This paper inspected observationally the effect of M&As on the post-merger financial execution of Greek merger-included firms at a long-run viewpoint and in understanding to their worldwide introduction (domestic or international M&As). The post-merger financial performance of a broad specimen of Greek obtaining listed firms was researched with bookkeeping information examination. Two profitability ratios (ROA, ROE) were utilized with the end goal of this study, so as to allocate firms' post-merger financial performance. The recognized results uncovered that there is no noteworthy change of any investigated irregular in the post-merger performance at the sample firms. Also, a further data analysis of this study revealed clearly that there is no difference from the international orientation (domestic or international M&As) for the acquiring firms of the research sample at any of the two examined accounting ratio. Thus, the result of this study is not consistent with Hymer’s (1976) argument that the transactions of international M&As are considered for the acquiring firm as higher risk investments in a new environment, but also provide opportunities for higher profitability with the development of economies of scale at the hosting country of the investment, for the post-merger performance and profitability of the present examined Greek acquiring listed firms.

Mantravadi, and Reddy, (2008). Post-Merger Performance of Acquiring Firms from Different Industries in India, International Research Journal of Finance and Economics, Vol.1 Mantravadi and Reddy (2008), pointed several studies that have tried to determine economic impact of mergers and acquisitions on industry alliance, yields to shareholders subsequent to M&A, and the post-merger performance of firms. Whether or not a merged company achieves the anticipated performance, is the critical query that has been studied by most researchers. Numerous methods have been hypothesised for analysing the success of mergers and these measures included both short term and long-term impacts of merger declarations, special effects on shareholder earnings of terminated mergers, aggressive takeover efforts and open offers. Empirical results show that the shareholders of target firms are clearly the big winners in business combination transactions; mainly owing to the high control premiums they receive (Bruner, 2002; Tuch and Sullivan, 2007). Literature indicates that acquiring firms’ shareholders obtain zero or, even inferior, undesirable abnormal returns, principally for stock-financed M&A (Bruner, 2002). On the contrary, Chari, et al (2004) objected that the value creation is positive for both the acquirer and target firm, with the effect on the target firm being approximately twice as large.

Andre, Kooli, & L'Her, (2004). Buy Stock or Sell Stock: The long-run performance of mergers and acquisitions: evidence from the Canadian stock market. Financial Management, 33, 27-43. Andre, Kooli and L'Her (2004) studied the long-term performance of 267 Canadian mergers and acquisitions that took place between 1980 and 2000, using different calendar-time approaches with and without extend beyond cases. Their results recommended that Canadian acquirers drastically underperform over the three-year post-event period. Additional examination showed that their results are reliable with the extrapolation and the method-of-payment hypotheses, that is, allure acquirers and equity financed deals underperform.

Ansoff, Bradenburc, Porter, & Radosevlch, (1971). Acquisition behavior of U.S. manufacturing firms, 1946-1965. Nashville: Vanderbilt University Press

Ansof, Bradenburc, Porter and Radosevlch (1971) examined the post-merger performance of acquiring firms and establish that following an acquisition, low sales growth companies confirmed significantly higher rates of growth, while, high sales growth companies established lower rates of growth. On the other hand, even though low sales growth companies showed higher rates of growth after acquisitions, they in fact suffered decreases in their mean P/E ratios, mean EPS and mean dividend payouts. The similar pattern of discrepancy found in the high sales growth companies whereby their performance levels for EPS, PE ratio, earnings and dividend payouts were greater. Low sales growth companies financed their acquisitions through decreased dividend payouts and the use of new debts. In contrast, high sales growth companies with other strategies tended to decrease debts but increase dividend payouts. Acquisitions were in common unbeneficial, as they did not contribute to increases in all of the variables of the companies' growth. Acquiring firms registered lower rates of growth as compared to the non-acquiring firms and this was more pronounced for low sales growth acquiring firms.

Ghosh, (2001). Does Operating Performance Really Improve Following Corporate Acquisitions? Journal of Corporate Finance, Vol. 7, No. 2, 151-17

Ghosh (2001) examined the question of whether operating cash flow performance improves following corporate acquisitions, by means of a design that accounted for greater pre-acquisition performance, and found that merging firms did not show evidence of improvements in the operating performance following acquisitions. Zou, Wei and Zhang (2011), established that financial performance of the sampled (51 firms) companies listed on China’s Shenzhen and Shanghai Stock Exchanges, improved after mergers. These merger findings consented with Healy, Palepu and Ruback (1990) results. Kearney (2008), analysed 175 mergers, they separated each merger type and for its operational impact on creating shareholder value, and measured it in terms of sales growth and profitability. They identified treating all mergers alike, as the major cause of post-merger financial slowdowns (failure to sustain growth momentum). They concluded that, merger success depends on taking a more nuanced approach to merger integration, thus tailoring approaches to each merger type. Martynova, Oosting and Renneboog (2007) investigated the long-term profitability of corporate buyouts in Europe, and initiated that in a corporation, the

acquiring and target companies significantly outclassed the median peers in their industry prior to the takeovers.

Loderer, & Martin, (1992). Post-Acquisition Performance of Acquiring Firms. Financial Management 21, 69-79. They used a population of 304 mergers and 155 acquisitions occurred during the periods between 1966 and 1986. They view a negative but not worth mentioning abnormal return over the five succeeding years (major when considered over three years) for the mergers and positive but of no consequence abnormal return for the acquisitions. They observed confirmation of negative performance in the second and third post-acquisition years, but that performance occurs mainly in the 1960s and 1970s, and fade away in the 1980s.

Ingham, Kiran, and Lovestam, (1992). Mergers and profitability: a managerial success story? Journal of Management Studies, 29, 195-208. This has been done by surveying 146 of the UK's top 500 companies. The study given away that is the ordinary recompense of increased profitability which has motivated the takeover market and that it is this customary appraises which is used in ex-post assessment. According to the results, managers firmly take in that their takeover activity had been performance pleasing to the eye for their company. The substantiation on hand did put forward that the incorporation of small acquisitions into an existing organizational structure may be obtained not including severe problems of loss of control, and the successive decline in performance which overwhelmed large acquisitions.

Bernile, and Lyandres, (2011). Merger Synergies along the Supply Chain. Bernile and Lyandres (2011) examined post-horiontal merger performance measuring merger synergies along supply chain and concluded that synergies are an important determinant of the market reaction by product market rivals, customers, and suppliers to horizontal merger announcements. They employed, hand-collected dataset of projected merger synergies and discovered that synergy forecast are negatively related to returns to rivals upon merger announcement and are generally positively associated with returns to firms operating in upstream and downstream industries. Bernile and

Lyandres (2011) findings aids the views of Bernile and Baugues (2011), who discovered that post-merger performance of merging firms is positively linked to projected merger synergies.

2.11 Summary

The reflection of post-merger performance of acquiring firms appears to be less demanding said than done. Indeed, even in spite of the way that there is an enormous arrangement of experiential exploration on post-merger performance, next to no of it has demanding position to listed firms in creating economies and the relationship of business sector reaction to merger distributions (Sunde and Zvinamoyo, 2008). The most vital trademark that has been secluded in created story and inquires about, is corporate administration in association with M&As. Gompers et al. (2003) measures the relationship between corporate administration and long haul value profit, accounting measures and firm estimation of performance for the U.S. market. They reasoned that all around represented organizations show improvement over their unsuccessfully administered partners. This has conduct on the listed firms, neighborhood securities exchange and universal markets because of cross-fringe mergers and globalization in respect to capital markets. Examining the writing and inquires about done on execution of procuring firms in a merger, a conclusion can be drawn that the specialists had conflicting suppositions and perspectives to the relationship between mergers declarations and results, for example, market response, authoritative organizing and related changes, for example, society, execution, work issues and rivalry. Then again, such fanciful story and study has started a point for dispatching the crucial connection in the middle of mergers and firms' performance.

CHAPTER III:

RESEARCH METHODOLOGY

3.0 Introduction

This chapter deliberates on the research approach and methodology engaged by the researcher, in data collection, analysis and presentation on post-merger performance of acquiring firms trading on Zimbabwe Stock Exchange. Data collection techniques, sources of data, sampling designs, validity and reliability were discussed including how the presentation and analysis of the data were done.

3.1 Research Design

For the purpose of this study, the researcher was adopted the descriptive and quantitative research design, in researching and assessing the post-merger performance using share prices performance measures. Dewan (2011) employed this same research design in his study of mergers’ effects on profit. The research design enhanced the findings of more answers on what exactly is the impact of merger on acquiring firms, in particular its performance. Quantitative (table and graphs) and qualitative information was used for data presentation. This study was based on secondary data that has originated from financial institutions and listed companies on ZSE. 3.2 Market Model

For analysis purpose, the market-model was used since it is one of the yardsticks in evaluating abnormal returns by engaging daily data, with variations of daily closing prices for stock dividends and splits (Wong and Cheung, 2009). The use of market- model usually improves the probabilities of being able to separate the effects of specific events; it is this model that was adopted in this paper. Beverly (2007) also used this model in her study on stock markets event studies. The market model contends that returns on security j, are linearly correlated to yields on a market portfolio (Wong and Cheung, 2009), as defined below; 퓡풋풕 = 휶풋 + βjRmt+εjt Where: ℛ푗푡 = the daily rate of yield on security j on day t,

Rmt= the daily rate of yield on market index on day t Βj= a covariance amid ℛ푗푡 and Rmt dividend by a variance of Rmt i.e, covariance (ℛ푗푡, Rmt) /Var(Rmt) 휶풋 = expected value of (ℛ푗 − βjRm) εjt = model error of security j on day t 3.3 Population

The sample population for this study considered the firms that merged on the Zimbabwe Stock Exchange since 2005, as related information was ready accessible. For continuity, the relevant population was similar to that used in Kyei’s (2008) study, with slight adjustments criteria; Be listed on the ZSE for at least of one year prior to the acquisition and remain listed for at least a year (Kyei (2008) only require the companies to remain listed five years after acquisition).

3.4 Sampling

Purposive sampling was applied to sample the listed companies, since it; yield information, adds credibility to the sample when potential purposeful sample is larger than one can handle, fast, inexpensive, easy and that the subjects (acquiring firms) were nominated, because of their convenient accessibility and proximity to the researcher.

3.5. Data collection instruments

The study focused fundamentally on the use of acknowledged data and material to connection the pressure of mergers on share price performance. In this study, two sets of data were used, which comprise the population of significance and second set of data, used to appraise the share price performance of acquiring firm. Such data (daily share price of listed firms) was derived from the ZSE database of information on all listed firms. Hypothesis test 1 and 2 were evaluated using such data.

3.6. Secondary

Secondary data was resultant from audited financial statements, economic and financial research newspapers, a variety of listed companies websites and ZSE notes. The researcher collected data from ZSE electronic information database for analysis. The main motives for carrying out this study based on secondary data was to facilitate the researcher to study more on data analysis and as the data is definitely believed to be open from misrepresentations. Though, the data would have been collected for other purposes other than for this research.

3.7. Data presentation and Analysis

The researcher used a number of methods in analyzing data and interpreting data, and information was presented in forms of tables and graphs where necessary to enhance clear understanding. Microsoft excel sheet version (2013) was used in data analysis and computation. The researcher made use of share prices and industrial indices from ZSE from 2005 up to 2014 and come up with a market-model. Analysis was concentrated on listed companies that have been involved in mergers.

3.8. Summary

This chapter planned on the study method and its competence in deal with the study objectives and the statement of the problem. The chapter dwelt on the research design, model used, population and sample size, data sources and data presentation and analysis procedure. The following chapter shall look at and present the discoveries from data collection.

CHAPTER IV

DATA PRESENTATION, ANALYSIS AND INTERPRETATIONS

4.0 Introduction This chapter, the researcher concentrated on data analysis, presentation and discussed the outcomes based on quantitative analysis of stock share performance. Two different analysis methods were used on deriving conclusions. These methods constitute event studies and graphical observations. Data was presented and analysed, to validate whether stock market performance improves or not, after a merger. Initially, graphical observations were made to present data, then the final past focused on event studies.

4.1 Data analysis and interpretation

Acquiring firm’s share were collected from the Zimbabwe Stock Exchange and the share prices were converted to United States Dollars (USD), since they were quoted in the Zimbabwean Dollar (ZWD) for the period 2000 to early 2009. The Old Mutual Implied Rates (OMIR) was used in conversion of CBZ share prices to USD per share quotes. The converted share prices are shown in appendix 1. Below are some of the listed companies which merged on the ZSE. Table 4 Some of the Merger or Takeovers that transpired since 2005

Firms that merged Company formed First bank, ZBS FBS Holdings CBZ, Beverly and Datvest CBZ Holdings Zimbank and intermarket ZB Holdings Unicem and Pretoria Portland Cement Pretoria Portland Cement Limited Zimplow and Tractive Power Holdings Zimplow Holdings Limited

Source: Newspapers (the Herald (25/04/2013, 14/10/2012). The Zimbabwean (25/04/2013) and Newsday (27/02/2013), Websites (Zimplow (2013), ZB Financial Holdings (2012), Dairiboard (2010), RBZ (2005) and CTC (2004), Annual Reports (CBZ (2007).

4.2 Zimplow and Tractive power Holdings merger-June 2012

Figure 3 Zimplow Holdings share price trend before and after merger announcement. Source: Raw Data, 2015

Zimplow Holdings regular share price showed an insignificant increase in value, from 6.0c to 7.5c in the thirty days prior to and after the merger announcement in June 2012. Prior to merger announcement, the share price rose to 8.0c on the 16th of May, 2012 and remained steady at that price till May 28, before slight decrease to 7.0c on the 29th of May. This was followed by an immediate movement of share prices from 7.0c to 7.5c in reply to the merger announcement made in June, 2012. The share price remained valued at US$0.75 for the 5 days following the event, before gradually increasing to 7.65c on July 6 and increased to 7.75 on July 9. Zimplow Holdings share price on the ZSE, remained at 7.75 from 9 July to 20 July, which is a period of 9 days without any price deviation. On the 23rd of July, the share price dropped to 7.0c from 7.75c, this share price lasted for 2 days before an unexpected change to 7.50c which it maintained for the last 5days of July. The share price fluctuations were mostly due to speculation by investors, inflation and price ceilings set for share prices, as would have been managed by the RBZ regulator. This was consistent with the views of Patell and Wolfson (1984), who stated that, the availability of intraday data enabled tests, which offer evidence of public information impacting stock prices within minutes

Table 5 Zimplow Holdings: Average weekly share performance

Pre-merger Post-merger

Period (week) -4 -3 -2 -1 1 2 3 4

Average 6.1c 6.5c 8.00c 7.79c 6.28c 7.75c 7.75c 7.36c share price

Marginal 0.4c 1.5c -0.21c -1.51c 1.47c 0c -0.39c price Share Share price 0.06557 0.23077 -0.0268 -0.194 0.23506 0 -0.0507 growth rate

Source: Raw Data, 2015 The average weekly share price decreased by 2.68% from 8.00c to 7.79c, a week before the merger was announced, prior to the decrease in the weighted average weekly share price, increased at a growth rate of 6.557% (i.e from 6.1c to 6.5c) and 23.077% (i.e from 6.5c to 8.00c) in week 3 and 2 respectively. A week after the window period (period of merger), the average share price decreased by 19.4% (i.e from 7.79c to 6.28c) as compared to the average share price for week 1, prior to the event. Week 2, after the event witnessed a 23.506% share price improvement, this resembles a marginal share increase of +1.47c to 7.75c. The average weekly share price for week 3 remained fixed, as was in week 2; this resulted in a nil marginal price variation. The percentage growth rate slightly decreased in week 4, at a rate of 5.07% which gave a negative marginal price variation of 0.39c and ranked the average weekly share price at 7.36c from 7.75c recorded in week 3. From share price analysis, it is obvious that the share price movement was insignificant as the prices were unpredictable

4.3 CBZ and Datvest merger-June, 2005.

Figure 4 CBZ Holdings share price trend, pre- and post-merger period Source: Raw Data, 2015

Due to undeveloped capital market and high inflation rates that prevailed in the period under review, the ZWD share price were converted to USD, using the Old Mutual Implied rates, to cater for share prices instability, economic influences and enhance the true reflection of share performance. For detailed information on the implied rates, see the appendix 1. The graph presentation, indicates clearly that CBZ share worth had remained unchanged around 30 days to 28 days before the merger. At around 26- 25 days in the pre-merger period, the share price increased by 6.94%, to settle at US$0.00000602 from US$0.00000560, this price remained fixed till 25th day. This might have emanated from merger speculation that prevailed in the pre-merger era. Probably, around 21 days before the merger the share price increased by a marginal gain of US$0.00000008 (which is a 1.44% increase) which set the share valued at US$0.00000574 from the prior value of US$0.00000566. the CBZ share price gain trend continued till around day 17 from day 21, with the highest share growth recorded on day 19 at a rate of 10.77% (which is was a US$0.00000073 value gain and a share quote of US$0.00000680). This gradual price gain, could have been influenced by the investors’ conviction and merger feasibility, which resulted in increased stock market performance, towards the month of merger. There was an abrupt decline in share price around 17th day, as the price fell to around US$0.00000660 per share which was a 6.89% value loss from day 18, 38

US$0.00000705 share price. The up and down share price movement witnessed around the 13th day to day 10, cannot necessarily be attributed to poor share performance, as other factors such as, economic depression around the period under review; Zimbabwean currency devaluation; the “zero to hero” era, when zeros were slashed from the currency in pursuit of maintaining economic sense to national monetary trading and price ceiling which were set by the Reserve Bank of Zimbabwe for monetary control intents in attempt to hold inflationary pressure this might have contributed towards to the CBZ share value loss and thereby hindering actual stock market performance.

On day 13, the share lost value by 2.78% and a share price quote of US$0.00000642 from US$0.00000660, and on day 12 the share price rose to US$0.00000658 which is a 2.44% gain and on day 11, share gained 2.52% in its value which then set the price at US$0.00000675. On the day 10, the stock price lost 10.48% which set the price at US$0.00000611. This stock price trend explains, price instability and reflects a high share price volatility, towards the month of merger and might resembles new information leakages and insider trading effect on CBZ stock performance. A week earlier to the month of merger, the stock market outcome for CBZ continued to decline as shown from the graph presentation the price maintained at US$0.00000585 for the 7-6 days before the merger, after the price had decreased by 4.44% from US$0.00000611 day 10 day share quote. This could have resulted from continued speculation and argumentative information circulating in the capital market for possible high risks associated with CBZ merging Datvest. The presentation also reveals that the 5days prior to the month of merger, the ZSE recorded the lowest share quotes for CBZ, comparing to the share quotes published in the 30 day prior to the merger. The share quote recorded on day 5 and 4 remained valued at US$0.00000538, which was a 0.45% price loss and a marginal loss of US$0.000000024. This reflects that the capital markets and its participants (stockholders) are very sensitive and highly influenced by any information they come across that concerns firms strategic trading and routine operations. Regardless of the challenges that CBZ faced, there was an insignificant impact on its share price in the 21 days around the merger announcement.

Trivedi, A., Desai, J. and Joshi, N.A (2013) also points that, around the 21 days the merger there is insignificant share price effects or change. In the post-merger period, the share price quotes were low compared to prices which were quoted in the 30 day period from month of merger. Day 1, recorded share value of US$0.00000336 which then declined by 4.02% on day 2, and set the share value at a nominal value of US$0.00000455 since the merger, which was a 23.46% gain from US$0.00000348 day 7 price, this may have been as a result of increasing investors, confidence in the gain and benefits of the merger with Darvest. A 6.81% share price decrease was a recorded on day 9 after the merger, which then set the share at US$0.00000426, such changes may have rose from economic environment in which the firm traded in, such as hyperinflation effects and price ceiling. In the 10-16 days period after the merger, CBZ performed favourably on the ZSE, as the share prices continued to increase at an average rate of 6.52% before declining by 1.79% on day 19.

A share price of US$0.00000504 was quoted on day 11, which was a 9.52% increase, and on day 12, 15 and 16 the share gained 8.78%, 5.56% and 2.17% respectively, and set the share prices at US$0.00000553, US$0.00000585 and US$0.00000588 accordingly. This price increment from day from day 10-16 might have risen from the synergistic gains and economies of scale the merger has brought and thereby increasing investors demand for CBZ shares, forcing the share prices to increase. At around 19 days after the month of merger the share value declined by1.79%, which set the share value at US$0.00000588, and this could be a reflection of share’s fluctuations growth trend and capital market forces such as volumes of trade. Most likely at around day 20-23, CBZ shares marked the highest share values of an average price of US$0.00000762 and an average increment rate of 8.84%, this may have been driven by market forces such increased CBZ share demand, increased investors’ confidence in the merger, and synergy gains that have accrued to CBZ, giving it a competitive advantage. The share prices began to decline from around day 26-30 after the merger, which might came as a result of CBZ share demand decline or as a result of monetary controls put in place which may had an adverse impact on the entire capital market or emergence of high inflation pressure on investments.

Table 6 CBZ Holdings: Average weekly share performance Pre- merger Post-merger Period -4 -3 -2 -1 1 2 3 4 (week) Average 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 share 582 651 649 558 333 479 638 743 price(U SD) Margina 0.00000 - - - 0.00000 0.00000 0.00000 l 069 0.00000 0.00000 0.00000 146 159 105 variance 002 091 225 (USD) Share price 0.11856 -0.003 -0.1402 -0.4032 0.4384 0.3319 0.1646 growth rate

Source: Raw Data, 2015 From table 6 above , CBZ Holdings average weekly share price increased by 11.856% in week 3 which is a +US$0.00000069 marginal gain, in the pre-merger period. However, in week 2 the stock value slightly declined by a marginal value of US$0.00000002, which is a 0.30% decrease and ranked the stock price at US$0.00000649 from an average price of US$0.00000651 recorded in week 3. This may have been as a result of inflation pressure on prices, which may have caused shares to value highly so as to adjust for the looming inflation in the period under review. A week prior to merger period, the average share price declined by US$0.00000091 (which is a 14.02% share price decrease), and marked the weekly average price at US$0.00000558. Week 1 prior to the merger, recorded the lowest weekly stock market performance in the 4 weeks average performance, which may explain increased doubt or adverse information leaks into the market which then stimulated differing investors sentiment towards CBZ shares. In the post-merger period, the weekly average price gradually gained strength which implies that the share price performance increased due to CBZ merger, and this may have emanated from the projected merger synergies such as investment services and short-term money market investments for both corporate and individual clients, which has improved CBZ banking services viability, increasing its effectiveness thereby directly

improving market stock performance. Since investors acquire shares in firms that are viable and productive, as they anticipate wealth accumulation from the acquired shares, this may have drove demand for shares to increase and if the share prices were highly elastic to demand, then the prices would increase and result in improved CBZ post-merger stock market performance. Week 4 recorded the highest weekly price average of US$0.00000743 and monthly average growth rate of 13.27%, which depicts that CBZ post-merger performance out-classed the pre-merger performance which had a highest weekly average price value of US$0.00000651 and a negative monthly average growth rate of about 0.88%. This share price appreciation trend in the post-merger era, explains the benefits associated with firms expanding and the financial, operations and service economies of scale that accrued to CBZ. This outcome shows clearly that there was a significant improvement in CBZ Holdings corporate stock market performance after the merger with Datvest.

4.3.1 CBZ (Datvest) Abnormal Returns Trend and Cumulalive Abnormal Returns June, 2005

CBZ ABNORMAL RETURNS TREND

-30 -27 -24 -21 -18 -15 -12 -9 -6 -3 0 3 6 9 12 15 18 21 24 27 30 -50

-100 y=-0.8411x-167.36 푅^2=0.6736 -150

-200 ABNORMAL RETURNS ABNORMAL

-250 DAY FROM MONTH OF MERGER ABNORMAL RETURN TREND

Figure 5 CBZ Abnormal Returns Graph

Source: Raw Data, 2015

CBZ Cumulative Abnormal Return 0 -30 -27 -24 -21 -18 -15 -12 -9 -6 -3 0 3 6 9 12 15 18 21 24 27 30 -2000 y=-162.74x-4857.8

-4000 푅^2=0.9975

-6000 CAR -8000 -10000 -12000 DAY FROM MONTH OF MERGER

CAR Linear (LINEAR (CAR))

Figure 6 CBZ Cumulative Abnormal Returns graph

Source: Raw Data, 2015 The abnormal returns graph shows that CBZ Holdings security was outperformed by the average market performance, which resulted in series of negative abnormal returns and protracted negative cumulative abnormal returns from the CBZ security. This may have emanated from ZSE market efficiency, where there was limited insider trading activity afore the public merger announcement. These series of negative cumulative abnormal returns and abnormal returns suggest that the acquiring shareholders earn negative abnormal returns from mergers immediately before the announcement date and this contradicts to the findings of Fuller, Netter and Stegemoller (2001). They argued that shareholders earn about an average zero abnormal return at the announcement of acquisitions, regardless of tremendous variation in returns. CBZH security continues to gain negative abnormal returns during pre-merger period as shown in Fig.5 and 6. This could be a result of disturbances such as financial crisis, faced by management that lowered the expected corporate stock performance on ZSE or the overreaction to the run-up in stock price before the announcement of the event. And this abrupt reaction resulted in negative abnormal returns during post-event period since the share would have attain its maximum value before the announcement of the event to the public, hence yield no positive abnormal returns during post-merger period. This is consistent with the findings outlined by Meknassi (2010), who suggested that acquirers normally gain negative abnormal returns around the

announcement date. Also in consistent with Efficient Market Hypothesis, which highlights that CBZH security returns were less subdued to unpredictable and drastic movements, regardless of the fact that the expected return from the security remained higher than the actual return realised by CBZH security during the period under evaluation. This shows that information were evenly fused into the stock prices and this falls in line with the efficient market hypothesis, as highlighted by Lattimer (2009) and Malkiel (2003).

4.4 CBZ and Beverly Building Society acquisition-January 2007

Figure 7 CBZ Holdings share price trend, in the pre- and post-merger period Source: Raw Data, 2015

The graphical share trend shows that CBZ Holdings performed well on the ZSE market as the share quotes maintained an upward growth trend in share value at an average rate of 2.46%. This upward share gain trend may have been as a result of economies of scale that CBZ has accrued due to the previous merger with Datvest in 2005 and varying implies rates used in converting the share from ZWD to USD, may also have affected share prices. For example day 1, day2, and day 6 share prices were all ZWD$105.00 but after employing the OLD Mutual Implied Rates, the share values in USD differed and valued the shares at US$0.0000790, US$0.0000830 and US$0.0000860 respectively. This same phenomenon happened on day 5, day6, day8, day12, day 13, day21, and day 27, this variation hindered proper market share valuation analysis and reflection, especially in the ZWD currency. Fig 7 above shows that CBZ Holdings share value highly increased in the 2 weeks prior to the 44

acquisition, and around day 15-11, the prices accelerated abruptly from US$0001105 to US$0.0001190, which marked a 7.14% marginal gain. This continual price increase in CBZH share value may have emanated from new information assimilation in the capital market, relating to the potential acquisition of Beverly Building Society by CBZ. Despite the price decline around day 10-9 in the pre-merger period, the prices significantly went up on day, at a marginal growth rate of 1.72% from US$0.0001007 recorded on day 9, and the ZSE quoted the share at US$0.0001025. A day prior to the window period, the CBZH share gained value at a sharp increase rate 8.52% and resulted in a share quote of US$0.0001121. Increased investors’ confidence in the likelihood of the merger and anticipated merger success, may have exerted high demand of shares, thereby resulting in higher share prices so as to regulate the radical share demand. This shows that market speculation and release of new information about the merger, influenced the value of share price before the event period by triggering a positive market reaction. This agrees with the views of Sunde and Zvinamoyo (2008) ,noted that availability of any information indicating that a stock is under-priced, which offers a profit prospect, venture capitalist flock to acquire stocks and instantly bid up the price to a fair level, where average rates of return can be anticipated. Generally, the price trend in the pre-merger time, maintained a stable growth trend, as the prices were not highly vacillating. In the post-merger period CBZ Holdings enjoyed greater stock market returns and performance as the share quotes were actually higher than the pre-merger stock market performance. This may have resulted from the success of the merger and benefits associated with firm acquisition and the continuous appreciation of each ZWD per each USD. At around day 3, after the merger there was a sharp increases in share value from US$0.0004142 to US$0.0004872, which is a marginal appreciation of 14.99%. This share-price appreciation trend, continued to day 6 on which the share quote was US$0.00063, a 13.89% marginal gain from US$0.0005425 day 5 share value. This could be as a result of the economies of scale and profit performance accruing to CBZH in the post- merger period. The share continued gaining value, though at around day 9 after the month of merger there was a downward movement of 12.5% which set the share quote at US$0.00068 from US$0.0007650 share value. This was followed by a 3.83% increase at around 12 days which resulted in share value of US$0.0007071 and the

prices continued gaining value to around day 15, share quote of US$0.00075. From the above share trend exploration, it is clear that the post-merger period is characterized mostly by share price upward movement, this could emanated from merger synergies accruing to CBZH after the event window and ZWD appreciation per each USD. At around 18 days in the post-merger the share value went down by 1.35% which ranked the share at US$0.00074 from US$0.00075 quoted at around day 15. After that decrease, the share value had a sharp increase of about 12.28% at around 21 days in the post-merger period, which could have originated from the increased size of CBZH and attainment of critical mass and economies of scale benefits maybe in routine operations and other firm activities, as suggested by Trivedi, A., Desai, J. and Joshi, N.A (2013). At around day 24 after the month of merger, the share continued appreciating its value, this is shown by a US$0.000022 marginal price gain from US$0.0008440 to US$0.000866, which was a 2.63% growth increase. This could be as a result of shareholders call for more shares on the market, anticipating increased efficiency as a result of the merger, this may have contributed to increased share trading and resulted in high share value so as to match the demand. The share trend in Fig.7 above, indicates that at around day 27-30 after the month of merger, greatly improved and marked the highest share quotes of US$0.0010130 and US$0.001226. This 7.16% and 17.43% growth increase, from day 26 and day 27 share quotes respectively, may have resulted from increased hope and confidence of investors and shareholders in CBZ Holdings capabilities in improving shareholders return and wealth accumulation. This pre-and post-merger share performance analysis, it is clear that, the share-price performance improved exceedingly great and gained much value in the post-merger period than the pre-merger performance. The low money market investment rates, high inflation and lack of lucrative investments alternatives continued to be some of the factors sustaining demand on the Stock Exchange. This analysis proved that, the merger improves share performance of acquiring firm as a result of merger synergies, size effect and economies of scale which in turn increase share value and boost stock price-market performance. This agrees with the views of Al-Sharkas et al (2008) who showed that mergers could improve the cost and profit efficiencies of banks and provided an economic rationale for future mergers in the banking industry.

Table 7 CBZ and Beverly acquisition: Average weekly share performance

Week from -4 -3 -2 -1 1 2 3 4 event Average share 0.0000849 0.0001031 0.00011 0.0001051 0.00052 0.00071 0.00078 0.00095 price (USD) Marginal 0.0000182 4.8E-06 - 0.00041 0.00019 7E-05 0.00017 variance 0.0000028 (USD) Share price 0.2144 0.04656 -0.02595 3.90105 0.37624 0.09889 0 growth rate

Source: Weekly share averages derived from own computations. From table 7 above, CBZ Holdings average weekly share price increased by 21.44 % in week 3 which is a US$0.0000182 marginal gain, in the pre-merger period. However, in week 2 the stock value slightly improved by a marginal value of US$0.0000047, which is a 4.67% increase and ranked the stock price at US$0.00011 from an average price of US$0.0001031 recorded in week 3. This may have been as a result of availability of new information on the market, which may have caused shares to gain value due to investors share demand. A week prior to merger period, the average share price declined by US$0.0000028 (which is a 0.26% share price decrease), and marked the weekly average price at US$0.0001051. This may have originated from appreciation of ZWD in the last week to the month of merger which would mean less USD for a share, or effect of price ceilings around the merger period, which would have regulated share prices at specified levels irregardless of actual share performance; and adverse market response to the scheduled merger.

In the post-merger period, the weekly average price improved greatly which implies that the share price performance directly increased as a result of the merger, and this may have emanated from the projected merger synergies. Week 4 recorded the highest weekly price average of US$0.00095 and monthly average growth rate of 9.895%, which depicts that CBZ post-merger performance, out-classed the pre-merger performance. Week 1, after the month of merger, showed a positive market performance, as the average weekly average computed ranked to US$0.00052 which was a 390.01% marginal increase as compared to week 1 prior to the merger. This sharp increase in performance extended to week 2, after the merger at a growth rate of

37.60% and resulted in an average weekly market value of US$0.00071. This outcome shows clearly that there was a significant improvement in CBZ Holdings corporate stock market performance after the merger with Beverly Building Society 4.4.1 CBZ (Beverly) Abnormal Return and Cumulative Abnormal Returns on security-January 2007

CBZ Abnormal Return on Security 40

y=0.031x-63.201

0 -30 -27 -24 -21 -18 -15 -12 -9 -6 -3 0 3 6 9 12 15 18 21 24 27 30 -20 푅^2=0.0018 -40

Abnormal Return Abnormal -60

-80

-100 Day From month of merger Abnormal Returns Linear (Abnormal Returns)

Figure 8 CBZ Abnormal Returns Source: Raw Data, 2015

CBZ Cumulative Abnormal Returns 0 -30 -27 -24 -21 -18 -15 -12 -9 -6 -500-3 0 3 6 9 12 15 18 21 24 27 30 -1000 Y=60.762x-1935.2

-1500 -2000 푅^2=0.9981 CAR -2500 -3000 -3500 -4000 DAY FROM MONTH OF MERGER

CBZ CAR TREND Linear (CBZ CAR TREND)

Figure 9 CBZ Cumulative Abnormal returns graph Source: Raw Data, 2015

Both the abnormal and cumulative abnormal returns graphs highlights that CBZ Holdings security performance resulted in a series of negative abnormal returns and

prolonged negative cumulative abnormal returns before and after the acquisition of Beverly Building Society. This implies that CBZ Holdings shareholders on wealth gain issue, earned negative abnormal and cumulative returns for the period under review. The magnitude of wealth gains or loses got influenced by the trends on ZSE at the time of deal announcement; gains are more and losses are less, when the stock market move positively and vice versa. CBZ Holdings only encountered a positive abnormal return of 19.59 on day 1 after the announcement which may have originated from reduced competition in the acquisition market which then created an opportunity for CBZ to capture a positive abnormal return. And this positive abnormal return indicates that the stock market had a positive reaction to the announcement of merger and CBZ acquisition deals. The entire negative abnormal and cumulative abnormal returns could have emanated from ZSE market efficiency, where there was limited insider trading activity afore the public merger announcement. This could be a result of disturbances such as financial crisis, faced by management that lowered the expected corporate stock performance on ZSE or the overreaction to the run-up in stock price before the announcement of the event. These negative abnormal returns directly affected shareholders, by reducing their potential profitability, these outcomes agrees to the suggestions made by Schipper and Thompson in 2009. They postulated that a negative abnormal return directly reduces shareholders potential success.

4.5 Hypothesis test

This process of statistical testing involves setting up a null hypothesis and an alternative hypothesis, calculating a test statistic which gives the assertions of a population. A T-statistic distribution (one tailed test) was used to test for goodness of fit on whether there is significant improvement in corporate stock market performance after mergers through the use of contingency tables basing on the observations from the event studies. The statement of hypothesis is indicated below:

H0: There is significant improvement in corporate stock market performance after mergers.

H1: There is no significant improvement in corporate stock market performance after mergers.

The merger between CBZ Bank-Datvest merger and Zimplow-Tractive merger were used in this study to establish the performance of corporate stock after mergers on the firm’s industrial index and returns on a security respectively;

Ri(cbz) = -17.521 + 0.913Rm + 52.945 and Ri(zpl) = 3.631 - 0.272Rm + 0.101 (see appendix) The null hypothesis for this study is E (ARi) ≠ 0 while the alternate hypothesis says

E (ARi) = 0 Note that in an efficient market, where investors have coherent or unprejudiced prospects:

E (ARit) = 0 {E (εit) = 0}

From the t-test calculations, it is apparent that statistically there is significant improvement in corporate stock market performance after mergers at the ZSE. Thus, the use of t-test elaborated that there was sufficient evidence to reject the alternative hypothesis, as the calculated t-values of 0.019 and -1012.96 are less than the t-critical value at 5% level of significance, for CBZ and Zimplow Holdings respectively. This means investors are able to beat the market and earn abnormal profits. Thus the arrival of new information pertaining to an event such as a merger will result in an increase in the prices of shares. This is illustrated diagrammatically as follows:

Figure 10 Illustration of CBZ Holdings t-test null hypothesis results

Source: Raw Data, 2015

Figure 11 Illustrations of Zimplow Holdings t-test null hypothesis results

Source: Raw Data, 2015 The model was elected for use, because it can be applied for any distribution either discrete or continuous for which cumulative distribution function can be computed. However the hypotheses test cannot absolutely be relied on because of the following

 It suffers from the fact that the sample was small  The test model is sensitive to how grouping of the data is performed.

4.6 Summary

The chapter tested the significance improvement of corporate stock performance on ZSE after mergers. The findings showed that there is significant improvement on corporate stock performance, as share prices are affected by merger and acquisition events. These findings implies that there is relationship between mergers and takeovers and acquiring firms’ share prices in the pre-and post-merger period, thus according to the secondary data represented and analysed in this chapter. The subsequent chapter will conclude and make recommendations, on this research on the behaviour of stock prices in Zimbabwe by putting forward factors that could explain the behavior of stock prices on the ZSE.

CHAPTER V

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction

This chapter provides a summary of the research, conclusions and recommendations which aims at addressing the problem statement outlined in chapter one, it also gives suggestions for further research in the area of improving corporate stock performance in the post-merger era, in a developing economy. The conclusions and recommendations reasonably stream from the literature review and the analysis of findings from the secondary data, relevant to the effects of mergers to the acquiring firm share price performance on ZSE, and analysis shown in the previous chapter. The discussions and findings will be vital for current and potential shareholders, acquiring and target firms, and researchers on what could be looked at and also areas that may need further attention emanating from the changes that are associated with events such as mergers that have an effect on corporate stock performance and shareholders’ wealth or potential profitability.

5.1 Summary of Findings

The Zimbabwean economy encountered low inflows and undeniably accelerating disinvestment, stimulated by a developing wave by companies and societies worldwide that the political and economic dispensation in the country is challenging and economically risky. This resulted in firms listed on ZSE, share prices being valued according to business performance which is vulnerable to various threats. In an attempt to come up with the solution to the effect on M&A on shareholders wealth, in context of the stock market performance, the researcher used event study to assess the bearing of business M&A on defining stock prices, the impact of a change in share prices on ZSE industrial index and the return on a security and established the relationship between mergers and share prices. The findings from the event study meet the objectives of the study and help answer the research questions. The methodology of event study has wide application not only to the evaluation of post- merger performance but also to test market efficiency, as well as in the changes in

control over the company on shareholder wealth or in the theory of corporate finance to analyze the impact of dividend policy. Various cases discussed in the literature substantiate that the approach can also be found in the evaluation of response of share prices to events and decisions made by companies, which constitute: mergers and takeovers. The study clearly outlines mergers that took place during the period 2005- 2015 in Zimbabwe by reference from sources such as RBZ economic review publications and ZSE and for the period under review.

Share price movement was presented in linear graphs, and abnormal and cumulative abnormal returns regressions were done to test the behaviour of the share trend. The researcher established that there is a relationship between mergers with share price at ZSE as indicated in graphical exhibition on mergers in the previous chapter. The study provided evidence that merger events have a bearing on the acquiring firm share prices and return on security, these observations were attained from the use of market model and regression of excess returns on the security against excess returns on market. Return on security and return on market were derived from the analysis of share price trend movement and systematic industrial index changes on the ZSE respectively. Conversely, hypothetical and practical studies of the level to which post- mergers affect corporate stock on ZSE, adds more to the understanding of the capital market responses to events proclamations and how the securities respond to such events. Regardless of the fact that, the contemporary state of understanding the issue, especially in emerging financial markets in developing economies, is far from being definite. From the analysis in this study, it is evident that ZSE respond to events such as mergers and acquisitions.

5.2 Conclusions

The conclusions made originated from the research results as presented in chapter IV, hence they are research centred conclusions. They are summed up answers to research questions and are derived reliably from data reported in the previous chapter. The conclusions section shall validate whether or not conclusions favour with the philosophy of prior researches. The conclusions on the analysis are as follows:

Mergers and acquisitions impacts stock prices even after the merger announcement, this has been proved by the acceptance of the null hypothesis at 5% level of significance, that: there is significance improvement of corporate stock after mergers. The hypothesis test answered the research question of this study and the results validate the existence of effect of mergers to the share price. For instance, Zimplow share prices immediately went down after the window period for about a week and commenced to appreciate its value, whereas CBZ and Beverly merger, showed great stock price appreciation after the merger. This shows that mergers have a positive impact on share prices, as the shares tend to appreciate its value. The event of a merger or takeover drives the industrial index aloft as well as the return on a security. By examining the obtainable information, the study has evaluated the reaction of the stock price to mergers and acquisitions, and recognized that such events creates positive share price gain for the acquiring firm during the post-merger period as shown from the previous chapter results. Therefore it is possible to establish that, acquirers benefit from the actual merger in longer term. An acquisition or mergers is assumed to create value if the returns on the shares of the acquiring firm increase on the merger event announcement. The findings from event analysis reveal that there is definitely action in the prices of stocks around day 0, and that the merger is significant in stock pricing and behaviour.

Many inspirations can cause the stock price to fall or rise - from definite news about a corporation’s earnings to alteration in how shareholders feel about the capital market in broad-spectrum. Investors and capital market participant’s uncertainty can affect share prices negatively, thereby lowering share prices. From the literature review, it is evident that; company news and performance and performance, industry performance, investor sentiment and economic factors are other factors that can affect share prices other than mergers and takeovers. Here are some of the firm-specific factors that affect share prices; news issues on profits and earnings, and projected earnings, declaration of dividends, new product institution or product recall, acquiring an enormous new contract, change of administration, employee redundancies, and accounting scandals or errors.

On industry performance factors, the stock prices of corporations in the similar industry will interchange in tandem with each other. Since the market conditions

usually distress the firms in the similar industry in equivalently. But occasionally, the firm’s stock price benefits from a portion of bad news for its rival if the firms are contending for the same market. Investor confidence or sentiment can drive capital markets up or down, which forms the basis for stock prices to gain or fall. The common direction that a stock market takes can influence the stock value. For instance; in a weak market (bear market) stock prices decrease and investors’ confidence fades. It frequently occurs in an economy where there is high unemployment and recession, with escalating prices. Whereas, in a strong capital market share prices appreciates and investors’ confidence boosts, and this is common in markets operating in economies where there is economic recovery and investor optimism.

Economic factors such as;

Interest rates- The Reserve Bank of Zimbabwe can increase or reduce interest rates to alleviate or excite the Zimbabwean economy through monetary policy system. If a firm borrows cash to enlarge and develop its corporate, the cost of its debt is affected by higher interest rates. This can shrink corporation earnings and dividends payable to shareholders, thereby resulting in falling stock price. And, in periods of higher rates of interest, investments that recompense interest incline to be more striking to financiers than stocks.

Economic outlook. If it appears that the economy is likely to develop, share prices may increase. Stockholders may bargain more shares discerning they will reap from future returns and higher share prices. If the financial outlook is ambiguous, financiers may lessen their purchasing or commence selling.

Inflation and deflation. Inflation often decelerates sales and moderates profits. Higher prices often lead to high interest rates. For instance, the RBZ may increase interest rates to cool down inflation. These fluctuations tend to bring down stock prices. Whereas in deflation prices will be falling which means firm’s profits are lowered, reduced stock prices and result in a decreased economy activity, thereby forcing investors to sell their shares and switch to fixed income-investments like bonds.

Political and Economic political shocks. Changes all over the globe can impact positively or negatively the stock prices and economy. For instance, an increase in energy prices can result in lower; profits, sales, and stock prices. Activism or terrorism acts can likewise result in falling stock prices and weakening economic activity.

Economic policy changes. Emergence of a new government into power may result in drafting of new policies, which sometimes such changes may be seen as favourable for business, and at times not. They may channel to variations in interest rates and inflation, which may have a bearing on stock prices.

From the research findings mergers, acquisitions and any other factors can be improved to improve share prices performance by, developing incentive plans that pursue to motivate management to act in the best interest of shareholders thereby maximizing returns and improving stock performance. Merging with a firm that is regularly involved in real options, can also enhance stock value and increase shareholders’ wealth. Another way to improve stock performance is to spin off any corporate divisions or asset groups that can stand-alone. Derivatives that place stock in the hands of stock holder commonly work well than sell-offs that put money into the company coffers for management to consume. Informing the stock market of some "good news", either a potential merger or winning a major new contract can result in high demand shares thereby resulting in improved share performance. .Sometimes even the appointment of a new managing director or senior manager can cause improvements in stock performance. Normally share price would rise if the company where to report higher than anticipated profits.

5.3 Recommendations

To amply cultivate a good understanding of post-merger performance of acquiring firms, the following recommendations from the research findings should be taken on board by the various stakeholders’ outlines below:

5.3.1 Investors and shareholders

Investors are commended to study and follow economic reviews, trends and any capital market related information which will help them to respond promptly to the emergence of events that have an impact on their investments portfolios and be ready to beat the market. This affords investors an opportunity to acquire securities, when 56

they are still undervalued and hold them till such shares fully reflects all new information concerning an event, then they can choose to continually hold them or dispose them for their benefit. Moreover, shareholders should collectively exercise their voting rights so that beneficial mergers or acquisitions can be undertaken in their respective firms, and vote against displeasing mergers, to ensure that management work towards profit and shareholders’ value maximization.

5.3.2 Corporations and management

Corporations or management should negotiate mergers so as to enjoy benefits of operating at a large scale. Firms that pursue growth as the macro-fundamental goal, should consider merging with other small or developing prominent firms, so as to attain their aims and take advantage of economies of scale, diversification, lessened liquidity risks, and increased capital base and establish increased and viable market share, thereby boosting their corporate stock performance and corporate worth. Companies should ensure that they make avail every detail that regards their operations, mergers or acquisitions history giving exact and relevant information, such as share prices and circulars; regardless of time such events took place, to enable researches and firm performance analysis.

5.3.3 Zimbabwe Stock Exchange

In light of inferior corporate governance structures of some listed companies, the ZSE should redefine their listing necessities and make it obligatory that listed companies should follow guidelines on good corporate governance. For instance adopting, codes of best practice on corporate governance like the King Report or the Cadbury Report, just like the Johannesburg Stock Exchange, which adopted the King 11 Report as its code of corporate governance. This will alleviate on problems associated with company scandals and guaranteeing better economic growth and development in the long run. Moreover, there is need for ZSE to redesign or edify its website, such that data can be found easily, since the time the ZSE came into existence. For instance, there should be a brief summary of events such as mergers or acquisitions and detailed share quotes irrespective of changes in currencies, and probably a column of treasury bills and daily industrial indices, from 1993 to date and a brief explanation of each year’s major economic outlook that had a bearing on stock performance.

5.4 Suggestions for future research on the study

The findings on this study should be well thought-out in light of the following limitations. Firstly, it must be noted that the results of this research have a generalizability constrain, since only public firms listed on ZSE were examined. Secondly, the post-merger period examined in the study was only thirty days. This may not seem enough for gains to materialize subsequent to an acquisition, extending the post-merger period would help but cause sample size problems. Finally, when abnormal stock returns were analysed, one should bear in mind that the efficiency of the Zimbabwe Stock Exchange is questionable since it is a relatively small and emerging market, as compared to markets such as London Stock Exchange. Future studies should focus on Zimbabwean mergers and takeovers by rectifying these limitations.

5.5 Summary

Empirical evidence and academic research, have shown that mergers and acquisitions are used as growth strategies all over the world and contributed to the development of varying economies, whereas some of the mergers failed. From the findings of this research, it is revealed that post-merger stock performance of an acquiring firm is statistically improved and the mergers are beneficial to Zimbabwe’s economy.

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APPENDICE I CBZ (BEVERLY MERGER) SHARE PRICES DATE OMIR ZWD USD 1-Dec-06 0.00000075 105.00 0.0000788 4-Dec-06 0.00000079 105.00 0.0000830 5-Dec-06 0.00000078 110.00 0.0000858 6-Dec-06 0.00000082 120.00 0.0000984 7-Dec-06 0.00000082 120.00 0.0000984 8-Dec-06 0.00000082 120.00 0.0000984 11-Dec-06 0.00000082 120.00 0.0000984 12-Dec-06 0.00000084 130.00 0.0001092 13-Dec-06 0.00000085 125.00 0.0001063 14-Dec-06 0.00000085 125.00 0.0001063 15-Dec-06 0.00000085 130.00 0.0001105 18-Dec-06 0.00000085 130.00 0.0001105 19-Dec-06 0.00000085 140.00 0.0001190 20-Dec-06 0.00000084 120.00 0.0001008 21-Dec-06 0.00000084 120.00 0.0001007 27-Dec-06 0.00000082 120.00 0.0000984 28-Dec-06 0.00000082 125.00 0.0001025 29-Dec-06 0.00000083 135.00 0.0001121 1-Feb-07 0.00000165 251.00 0.0004142 2-Feb-07 0.00000168 290.00 0.0004872 5-Feb-07 0.00000175 310.00 0.0005425 6-Feb-07 0.00000175 360.00 0.0006300 7-Feb-07 0.00000172 450.00 0.0007740 8-Dec-07 0.00000170 450.00 0.0007650 9-Dec-07 0.00000170 400.00 0.0006800 12-Dec-07 0.00000179 395.00 0.0007071 13-Dec-07 0.00000185 390.00 0.0007215 14-Dec-07 0.00000200 364.00 0.0007280 15-Dec-07 0.00000200 375.00 0.0007500 16-Dec-07 0.00000200 370.00 0.0007400 19-Dec-07 0.00000221 370.00 0.0008177 20-Dec-07 0.00000222 370.00 0.0008214 21-Dec-07 0.00000222 380.00 0.0008436 22-Dec-07 0.00000222 380.00 0.0008436 23-Dec-07 0.00000228 380.00 0.0008664 26-Dec-07 0.00000235 400.00 0.0009400 27-Dec-07 0.00000250 405.00 0.0010125 28-Dec-07 0.00000273 450.00 0.0012263

CBZ (DATVEST MERGER) 2005 SHARE PRICE

DATE OMIR ZWD USD 3-May-05 0.00000042% 1,350.00 0.00000560 4-May-05 0.00000043% 1,400.00 0.00000602 5-May-05 0.00000043% 1,400.00 0.00000602 6-May-05 0.00000044% 1,300.00 0.00000574 9-May-05 0.00000045% 1,350.00 0.00000606 10-May-05 0.00000048% 1,410.00 0.00000680 11-May-05 0.00000046% 1,510.00 0.00000690 12-May-05 0.00000047% 1,500.00 0.00000705 13-May-05 0.00000044% 1,500.00 0.00000660 16-May-05 0.00000044% 1,450.00 0.00000642 17-May-05 0.00000047% 1,400.00 0.00000658 18-May-05 0.00000048% 1,400.00 0.00000675 19-May-05 0.00000045% 1,350.00 0.00000611 20-May-05 0.00000045% 1,300.00 0.00000585 23-May-05 0.00000045% 1,300.00 0.00000585 24-May-05 0.00000042% 1,300.00 0.00000540 26-May-05 0.00000045% 1,200.00 0.00000540 27-May-05 0.00000045% 1,200.00 0.00000538 30-May-05 0.00000045% 1,200.00 0.00000538 31-May-05 0.00000045% 1,200.00 0.00000537 1-Jul-05 0.00000035% 960.00 0.00000336 4-Jul-05 0.00000034% 950.00 0.00000323 5-Jul-05 0.00000034% 950.00 0.00000323 6-Jul-05 0.00000035% 960.00 0.00000336 7-Jul-05 0.00000035% 995.00 0.00000348 8-Jul-05 0.00000035% 1,300.00 0.00000455 11-Jul-05 0.00000036% 1,200.00 0.00000426 12-Jul-05 0.00000036% 1,200.00 0.00000426 13-Jul-05 0.00000042% 1,200.00 0.00000504 14-Jul-05 0.00000043% 1,300.00 0.00000553 15-Jul-05 0.00000045% 1,300.00 0.00000585 18-Jul-05 0.00000046% 1,300.00 0.00000598 19-Jul-05 0.00000047% 1,250.00 0.00000588 20-Jul-05 0.00000050% 1,300.00 0.00000644 21-Jul-05 0.00000060% 1,290.00 0.00000774 22-Jul-05 0.00000060% 1,290.00 0.00000774 25-Jul-05 0.00000060% 1,430.00 0.00000858 26-Jul-05 0.00000054% 1,500.00 0.00000810 27-Jul-05 0.00000050% 1,500.00 0.00000750 28-Jul-05 0.00000050% 1,200.00 0.00000600 29-Jul-05 0.00000051% 1,300.00 0.00000663

APPENDICE II

MARKET MODEL COMPUTATIONS ZIMPLOW HOLDINGS-Return on market and security Week ending ZPL(zpl)share price USD Ri Industrial Index Rm 5/4/2012 6.00 - 129.90 - 5/11/2012 7.00 0.17 130.28 0.002925327 18-May-12 8.00 0.14 131.64 0.010439054 25-May-12 8.00 - 132.03 0.002962625 6-Jul-12 7.65 (0.04) 133.77 0.013178823 13-Jul-12 7.75 0.01 131.55 (0.016595649) 20-Jul-12 7.75 - 132.03 0.003648803 27-Jul-12 7.50 (0.03) 133.53 0.113610540 i) Week ending Abnormal Returns –Zimplow Holdings

Week ending Ri*100 Rm*100 TB Rate(Rf) AR i(Y) AR m(X) Cumulative Abnormal return Ri-Rf Rm-Rf security 5/11/2012 16.6700 0.2925327 - 16.67 0.29253 16.666667 18-May-12 14.2900 1.0439054 - 14.29 1.04391 30.952381 25-May-12 - 0.2962625 - - 0.29626 14.285714 6-Jul-12 (4.3800) 1.3178823 - (4.38) 1.31788 (4.375000) 13-Jul-12 1.3100 (1.6595649) - 1.13 (1.65956) (3.067810) 20-Jul-12 - 0.3648803 - - 0.36488 1.307190 27-Jul-12 (3.2300) 1.1361054 - (3.23) 1.13611 (3.225806) Total 24.6600 2.7920037 - 24.48 2.79200 52.543335 Mean 3.5229 0.3988577 - 3.52 0.39886 7.506191

Week ending AR i(Y) AR m(X) Y-Y' (Y-Y')^2 X-X' (X-X')^2 Ri-Rf Rm-Rf y y^2 x xy x^2 5/11/2012 16.67 0.29253 13.14 172.76 (0.10632) (1.397511) 0.01 18-May-12 14.29 1.04391 10.76 115.84 0.64505 6.942529 0.42 25-May-12 - 0.29626 (3.52) 12.41 (0.10260) 0.361433 0.01 6-Jul-12 (4.38) 1.31788 (7.90) 62.38 0.91902 (7.258365) 0.84 13-Jul-12 1.13 (1.65956) (2.22) 4.91 (2.05842) 4.560417 4.24 20-Jul-12 - 0.36488 (3.52) 12.41 (0.03398) 0.119699 0.00 27-Jul-12 (3.23) 1.13611 (6.75) 45.55 0.73725 (4.975469) 0.54 Total 24.48 2.79200 426.25 (1.647267) 6.06 Mean 3.52 0.39886 60.89 (0.235324) 0.87

β = Σxy/Σx2 = -0.27155817

α = Y mean – β* X mean = 3.630993641

Therefore, Ri = 3.63 -0.27156Rm + 0.101

ZIMPLOW ABNORMAL AND CUMULATIVE ABNORMAL RETURNS

Return on SecurityRisk Free Abnormal return Cumulative AR Day from event share price USD Ri*100 TB Rate AR AR^2 CAR -30 6.00 0 0 0 0 0 -29 6.00 0 0 0 0 0 -28 6.00 0 0 0 0 0 -27 6.00 0 0 0 0 0 -26 6.00 0 0 0 0 0 -25 6.00 0 0 0 0 0 -24 6.00 0 0 0 0 0 -23 6.00 0 0 0 0 0 -22 6.00 0 0 0 0 0 -21 6.00 0 0 0 0 0 -20 7.00 0 0 0 0 0 -19 7.00 0 0 0 0 0 -18 7.00 0 0 0 0 0 -17 7.00 0 0 0 0 0 -16 7.00 0 0 0 0 0 -15 8.00 14.28571429 0 14.28571429 204.0816328 14.28571429 -14 8.00 0 0 0 0 14.28571429 -13 8.00 0 0 0 0 14.28571429 -12 8.00 0 0 0 0 14.28571429 -11 8.00 0 0 0 0 14.28571429 -10 8.00 0 0 0 0 14.28571429 -9 8.00 0 0 0 0 14.28571429 -8 8.00 0 0 0 0 14.28571429 -7 8.00 0 0 0 0 14.28571429 -6 8.00 0 0 0 0 14.28571429 -5 8.00 0 0 0 0 14.28571429 -4 8.00 0 0 0 0 14.28571429 -3 8.00 0 0 0 0 14.28571429 -2 7.00 -12.5 0 -12.5 156.25 1.785714286 -1 7.00 0 0 0 0 1.785714286 1 7.50 7.142857143 0 7.142857143 51.02040817 8.928571429 2 7.50 0 0 0 0 8.928571429 3 7.50 0 0 0 0 8.928571429 4 7.50 0 0 0 0 8.928571429 5 7.50 0 0 0 0 8.928571429 6 7.65 2 0 2 4 10.92857143 7 7.75 1.307189544 0 1.307189544 1.708744504 12.23576097 8 7.75 0 0 0 0 12.23576097 9 7.75 0 0 0 0 12.23576097 10 7.75 0 0 0 0 12.23576097 11 7.75 0 0 0 0 12.23576097 12 7.75 0 0 0 0 12.23576097 13 7.75 0 0 0 0 12.23576097 14 7.75 0 0 0 0 12.23576097 15 7.75 0 0 0 0 12.23576097 16 7.75 0 0 0 0 12.23576097 17 7.75 0 0 0 0 12.23576097 18 7.75 0 0 0 0 12.23576097 19 7.75 0 0 0 0 12.23576097 20 7.75 0 0 0 0 12.23576097 21 7.75 0 0 0 0 12.23576097 22 7.75 0 0 0 0 12.23576097 23 7.00 0 0 0 0 12.23576097 24 7.00 0 0 0 0 12.23576097 25 7.50 0 0 0 0 12.23576097 26 7.50 0 0 0 0 12.23576097 27 7.50 0 0 0 0 12.23576097 28 7.50 0 0 0 0 12.23576097 29 7.50 0 0 0 0 12.23576097 30 7.50 0 0 0 0 12.23576097 TOTAL 12.23576098 417.0607854 69

Var of AR [S]σ ²(i.e.) = 0.010135948 Pop Mean X (μ) = 0.030823455, Mean AR (Ў) = -3.599222447, t- Statistic = -1012.96103, n= 8 v) Expected Abnormal Returns -Zimplow Week ending ARi Rm E(ARi) Deviation Deviation^2 5/11/2012 16.6666667 0.002925327 13.1151127 -3.551554 12.61353581 18-May-12 14.2857143 0.010439054 10.6575555 -3.628159 13.16353773 25-May-12 0 0.002962625 -3.5505411 -3.550541 12.60634139 6-Jul-12 -4.375 0.013178823 -7.6481119 -3.273112 10.71326216 13-Jul-12 1.30718954 (0.016595649) -2.7744725 -4.081662 16.65996468 20-Jul-12 0 0.003648803 -3.5319074 -3.531907 12.47436706 27-Jul-12 -3.2258065 0.011361054 -6.5482814 -3.322475 11.03884013 Total -0.2806461 -24.93941 89.26984897 Mean -0.035080763 -3.11742625 11.15873112 From the Market Model Rit = αi + βRmt + εit εit = Rit - αi - βR E (ARi) = Ri – α – βRm var (εit) = σi2 = (total deviation)2 / n-2 = 17.8539702, Standard Deviation (σ) = 4.22539587

vi) Market Index Model and CAR computation- Zimplow 2012

AR Week ending Alpha Beta Rm Estimated R Ri [Ri-estRi]AR(et) AR/et squared 5-May-12 3.630993641 -0.27155817 0 3.630993641 - -3.63 13.18411482 5/11/2012 3.630993641 -0.27155817 0.002925327 3.630199245 0.17 -3.463532578 11.99605792 18-May-12 3.630993641 -0.27155817 0.010439054 3.628158831 0.14 -3.485301688 12.14732786 25-May-12 3.630993641 -0.27155817 0.002962625 3.630189116 - -3.630189116 13.17827302 6-Jul-12 3.630993641 -0.27155817 0.013178823 3.627444824 (0.04) -3.671164824 13.47745117 13-Jul-12 3.630993641 -0.27155817 (0.016595649) 3.635500326 0.01 -3.62242843 13.12198773 20-Jul-12 3.630993641 -0.27155817 0.003648803 3.630002779 - -3.630002779 13.17692018 27-Jul-12 3.630993641 -0.27155817 0.011361054 3.627908454 (0.03) -3.660166519 13.39681894 Total 0.027920037 29.04039722 0.25 -28.79278593 103.6789516 Mean 0.003490005 3.630049652 0.03125 -3.599098242 12.95986896 Var (AR) = (1/ (n-1) [ΣAR^2- ((ΣAR) ^2)/n] = 0.010135948 σ = 0.100677445

APPENDICE III 1. Market Model Computations-CBZ(Datvest Merger-2005)

day from event CBZ(cbz) share price USDReturn on securityRisk free Abnormal ReturnAR^2 Cumulative AR Ri*100 TB Rate AR CAR -30 1,350.00 0 150 -150 22500 -150 -29 1,350.00 0 150 -150 22500 -300 -28 1,350.00 0 150 -150 22500 -450 -27 1,400.00 3.703703704 150 -146.296296 21402.60631 -596.2962963 -26 1,400.00 0 150 -150 22500 -746.2962963 -25 1,300.00 -7.142857145 150 -157.142857 24693.87755 -903.4391534 -24 1,350.00 3.846153846 150 -146.153846 21360.94675 -1049.593 -23 1,300.00 -3.703703704 150 -153.703704 23624.82853 -1203.296703 -22 1,300.00 0 150 -150 22500 -1353.296703 -21 1,350.00 3.846153846 150 -146.153846 21360.94675 -1499.450549 -20 1,410.00 4.444444444 150 -145.555556 21186.41975 -1645.006105 -19 1,510.00 7.092198582 150 -142.907801 20422.63971 -1787.913906 -18 1,500.00 -0.662251656 150 -150.662252 22699.11407 -1938.576158 -17 1,500.00 0 150 -150 22500 -2088.576158 -16 1,450.00 -3.333333333 150 -153.333333 23511.11111 -2241.909491 -15 1,500.00 3.448275862 150 -146.551724 21477.40785 -2388.461216 -14 1,400.00 -6.666666667 150 -156.666667 24544.44444 -2545.127882 -13 1,350.00 -3.571428571 150 -153.571429 23584.18367 -2698.699311 -12 1,300.00 -3.703703704 150 -153.703704 23624.82853 -2852.403014 -11 1,300.00 0 150 -150 22500 -3002.403014 -10 1,300.00 0 150 -150 22500 -3152.403014 -9 1,300.00 0 150 -150 22500 -3302.403014 -8 1,300.00 0 150 -150 22500 -3452.403014 -7 1,300.00 0 150 -150 22500 -3602.403014 -6 1,200.00 -7.692307692 150 -157.692308 24866.86391 -3760.095322 -5 1,200.00 0 150 -150 22500 -3910.095322 -4 1,200.00 0 150 -150 22500 -4060.095322 -3 1,200.00 0 150 -150 22500 -4210.095322 -2 1,200.00 0 150 -150 22500 -4360.095322 -1 1,200.00 0 150 -150 22500 -4510.095322 1 950.00 -20.8333333 185 -205.833333 42367.3611 -4715.928655 2 950.00 0 185 -185 34225 -4900.928655 3 950.00 0 185 -185 34225 -5085.928655 4 950.00 0 185 -185 34225 -5270.928655 5 950.00 0 185 -185 34225 -5455.928655 6 960.00 1.052631579 185 -183.947368 33836.63435 -5639.876024 7 995.00 3.645833333 185 -181.354167 32889.33377 -5821.230191 8 1,300.00 30.65326633 185 -154.346734 23822.91419 -5975.576924 9 1,300.00 0 185 -185 34225 -6160.576924 10 1,300.00 0 185 -185 34225 -6345.576924 11 1,200.00 -7.692307692 185 -192.692308 37130.32544 -6538.269232 12 1,200.00 0 185 -185 34225 -6723.269232 13 1,200.00 0 185 -185 34225 -6908.269232 14 1,300.00 8.333333333 185 -176.666667 31211.11111 -7084.935899 15 1,300.00 0 185 -185 34225 -7269.935899 16 1,300.00 0 185 -185 34225 -7454.935899 17 1,300.00 0 185 -185 34225 -7639.935899 18 1,300.00 0 185 -185 34225 -7824.935899 19 1,250.00 -3.846153846 185 -188.846154 35662.86982 -8013.782052 20 1,300.00 4 185 -181 32761 -8194.782052 21 1,290.00 -0.769230769 185 -185.769231 34510.2071 -8380.551283 22 1,290.00 0 185 -185 34225 -8565.551283 23 1,290.00 0 185 -185 34225 -8750.551283 24 1,290.00 0 185 -185 34225 -8935.551283 25 1,430.00 10.85271318 185 -174.147287 30327.27751 -9109.69857 26 1,500.00 4.895104895 185 -180.104895 32437.77324 -9289.803465 27 1,500.00 0 185 -185 34225 -9474.803465 28 1,200.00 -20 185 -205 42025 -9679.803465 29 1,300.00 8.333333333 185 -176.666667 31211.11111 -9856.470132 30 1,300.00 0 185 -185 34225 -10041.47013 Total -10041.4701 1700378.138

Standard deviation of AR [S]σ ²(i.e.) = 2755.718744, Pop Mean X (μ) = 0.011526344 Mean AR (Ў) = 17.49825609 ii) Abnormal returns (AR)-CBZ(Datvest) Week ending Ri*100 Rm*100 TB Rate (Rf) ARi (Y) ARm (X) CAR Ri-Rf Rm-Rf Security 5-May-05 15.38461538 7.726951256 150 -134.6153846 -142.2730487 -134.6153846 13-May-05 -13.33333333 -5.6301273 150 -163.3333333 -155.6301273 -290.2455119 20-May-05 -7.692307692 -4.34568742 150 -157.6923077 -154.3456874 -444.5911993 27-May-05 -20.83333333 -1.48685295 185 -205.8333333 -186.486853 -631.0780523 1-Jul-05 36.84210526 -0.53048825 185 -148.1578947 -185.5304883 -816.6085405 8-Jul-05 0 13.12145101 185 -185 -171.878549 -988.4870895 15-Jul-05 -0.769230769 18.69393003 185 -185.7692308 -166.30607 -1154.79316 22-Jul-05 0.775193798 6.501979899 185 -184.2248062 -178.4980201 -1333.29118 Total 10.37370932 34.05115628 1375 -1364.626291 -1340.948844 -5793.710117 Mean 1.296713665 4.256394534 171.875 -170.5782863 -167.6186055 -724.2137647

iii) Computations (β& α)-CBZ Week Ending ARi (Y) ARm (X) Y-Y' (Y-Y')^2 X-X' (X-X')^2 y y^2 x xy x^2 13-May-05 -134.6153846 -142.2730487 35.96290172 1293.3303 25.34555672 911.4997653 642.3972455 20-May-05 -163.3333333 -155.6301273 7.244953005 52.48934405 11.98847817 86.85596092 143.7236087 27-May-05 -157.6923077 -154.3456874 12.88597864 166.0484456 13.27291805 171.0345385 176.1703534 1-Jul-05 -205.8333333 -186.486853 -35.25504699 1242.918339 -18.8682475 665.2009518 356.0107631 8-Jul-05 -148.1578947 -185.5304883 22.4203916 502.6739593 -17.9118828 -401.5914262 320.8355449 15-Jul-05 -185 -171.878549 -14.42171366 207.985825 -4.25994352 61.43568574 18.14711883 22-Jul-05 -185.7692308 -166.30607 -15.19094443 230.7647928 1.312535496 -19.93865378 1.722749427 29-Jul-05 -184.2248062 -178.4980201 -13.64651987 186.2275045 -10.8794146 148.466148 118.3616628 Total -1364.626291 -1340.948844 3882.43851 1622.96297 1777.369047 Mean -170.5782863 -167.6186055 485.3048137 202.8703713 222.1711308 β = Σxy/Σx2 =0.913126609 α = Y mean – β* X mean=-17.52127754 Therefore, Ri = -17.521 + 0.913Rm + 52.945

iv) Expected Abnormal Return-CBZ Week ending ARi Rm E(ARi) Deviation Deviation^2 13-May-05 -134.6153846 7.726951256 25.8502081 160.4655927 25749.20645 20-May-05 -163.3333333 -5.6301273 9.32896326 172.6622966 29812.26866 27-May-05 -157.6923077 -4.34568742 13.7971327 171.4894404 29408.62817 1-Jul-05 -205.8333333 -1.48685295 -1.9543708 203.8789625 41566.63136 8-Jul-05 -148.1578947 -0.53048825 54.8477857 203.0056804 41211.30629 15-Jul-05 -185 13.12145101 5.53973148 190.5397315 36305.38927 22-Jul-05 -185.7692308 18.69393003 -0.3178782 185.4513526 34392.20417 29-Jul-05 -184.2248062 6.501979899 12.3593405 196.5841467 38645.32673 Total 119.4509127 1484.077203 277090.9611 Mean 14.93136409 185.5096504 34636.37014 From the Market Model Rit = αi + βRmt + εit εit = Rit - αi - βR E (ARi) = Ri – α - βRm var (εit) = σi2 = (total deviation)2 / n-2 = 46181.82686and σ = 214.8995739

v) Market Index Model and CAR computation-CBZ(Datvest)2005

Week ending alpha beta Rm Estimated R Ri [Ri-estRi]AR(et) AR/et squared 6-May-05 -17.52127754 0.913126609 0 -17.52127754 0 17.52 306.9951666 13-May-05 -17.52127754 0.913126609 0.077269513 -17.4507207 0.153846154 17.60456685 309.920774 20-May-05 -17.52127754 0.913126609 -0.056301273 -17.57268773 -0.133333333 17.4393544 304.1310819 27-May-05 -17.52127754 0.913126609 -0.043456874 -17.56095917 -0.076923077 17.4840361 305.6915183 1-Jul-05 -17.52127754 0.913126609 -0.01486853 -17.53485439 -0.208333333 17.32652106 300.208332 8-Jul-05 -17.52127754 0.913126609 -0.005304883 -17.52612157 0.368421053 17.89454263 320.2146559 15-Jul-05 -17.52127754 0.913126609 0.13121451 -17.40146208 0 17.40146208 302.8108825 22-Jul-05 -17.52127754 0.913126609 0.1869393 -17.35057829 -0.007692308 17.34288599 300.7756945 29-Jul-05 -17.52127754 0.913126609 0.065019799 -17.46190624 0.007751938 17.46965817 34.93931634 Total 0.340511563 -157.3805677 0.103737093 157.4830273 2485.687422 Mean 0.037834618 -17.48672975 0.011526344 17.49811414 276.1874913 Var (AR) = (1/ (n-1) [ΣAR^2- ((ΣAR) ^2)/n] =2755.718744 σ = 52.49494018

CBZ (Beverly Merger) CAR and AR) Date AR CAR -30 -66.33 -66.33 -29 -66.33 -132.66 -28 -66.33 -198.99 -27 -66.33 -265.32 -26 -66.33 -331.65 -25 -61.56809524 -393.2180952 -24 -70.87545455 -464.0935498 -23 -61.56809524 -525.661645 -22 -57.23909091 -582.9007359 -21 -66.33 -649.2307359 -20 -66.33 -715.5607359 -19 -66.33 -781.8907359 -18 -57.99666667 -839.8874026 -17 -70.17615385 -910.0635565 -16 -66.33 -976.3935565 -15 -66.33 -1042.723556 -14 -66.33 -1109.053556 -13 -66.33 -1175.383556 -12 -66.33 -1241.713556 -11 -54.33 -1296.043556 -10 -80.61571429 -1376.659271 -9 -66.33 -1442.989271 -8 -66.33 -1509.319271 -7 -66.33 -1575.649271 -6 -66.33 -1641.979271 -5 -66.33 -1708.309271 -4 -66.33 -1774.639271 -3 -62.16333333 -1836.802604 -2 -66.33 -1903.132604 -1 -58.33 -1961.462604 1 19.59592593 -1941.866678 2 -50.79215139 -1992.65883 3 -66.33 -2058.98883 4 -66.33 -2125.31883 5 -59.43344828 -2184.752278 6 -50.20096744 -2234.953245 7 -41.33 -2276.283245 8 -66.33 -2342.613245 9 -77.44111111 -2420.054356 10 -66.33 -2486.384356 11 -66.33 -2552.714356 12 -67.58 -2620.294356 13 -67.59582278 -2687.890179 14 -72.99666667 -2760.886846 15 -63.30802198 -2824.194868 16 -67.66333333 -2891.858201 17 -66.33 -2958.188201 18 -66.33 -3024.518201 19 -66.33 -3090.848201 20 -66.33 -3157.178201 21 -63.6272973 -3220.805498 22 -66.33 -3287.135498 23 -66.33 -3353.465498 24 -66.33 -3419.795498 25 -66.33 -3486.125498 26 -61.06684211 -3547.192341 27 -65.08 -3612.272341 28 -55.21888889 -3667.491229