International Review of Financial Analysis

9:1 (2000) 103–116

The deal of the century in Chile

Endesa España’s takeover of Enersis

Franco Parisi a, * Guillermo Yáñez b

a Finance and Management Department, Business School, Universidad de Chile,

Diagonal Paraguay 257, Oficina 1101, Santiago, Chile

b Department of Finance, Business School, Universidad Santo Tomas, Ejército 146,

Segundo Piso, Santiago, Chile

Abstract

We analyze the effect of the announcement of the tender offer made by Endesa Espan˜ a

to control Enersis Chile through the Chispas holding structure. In this clinical study of the

case, we summarize the salient points of the Chispa case—one of the most controversial in

Chile—and obtain the abnormal returns to the shareholders of the target firm using three

alternative models for robustness of results: the constant mean model, the market model, and

the market model adjusted for non-synchronous trading problems. Contrary to expectations

based on prior empirical research in the United States and United Kingdom, our results

demonstrate the absence of positive cumulative abnormal returns (CARs) for Chispa stockholders

during the takeover bidding event window. We present evidence in this case that the

governance structure of the target firm led to this seeming anomaly and conclude that the

generally accepted theories of corporate control and governance in the United States and

United Kingdom do not automatically apply to developing countries with differing legal environments.

Ó 2000 Elsevier Science Inc. All rights reserved.

JEL classifications: G34; F30

Keywords: Merger; Acquisition; Takeover; Endesa Espan˜ a; Enersis; Endesa Chile; Seemingly unrelated

regressors

1057-5219/00/$ – see front matter Ó 2000 Elsevier Science Inc. All rights reserved.

PII: S1057-5219(99)00025-3

Versión Completa en PDF: Aquí.

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