How Does Takeover Competition Affect the Stock Performance of Targets and Acquirers? Evidence from the European Union-Reference-Cited by-同舟云学术

How Does Takeover Competition Affect the Stock Performance of Targets and Acquirers? Evidence from the European Union

Published:2023-08-01 Issue:2 Volume:74 Page:161-193
ISSN:0948-5139
Container-title:Review of Economics
language:en
Short-container-title:

Author:

Kellner Tobias¹^ORCID,Maltritz Dominik¹

Affiliation:

1. Staatswissenschaftliche Fakulät , Universität Erfurt , Nordhäuser Strasse 63 , 99089 Erfurt , Freistaat Thüringen , Germany

Abstract

Abstract We examine the impact of M&A announcements on stock prices of targets and acquirers in the European Union from 2002 to 2021. In line with the literature, we find strong positive returns for the target firms’ stocks, whereas returns are low or insignificant for the acquirers. We contribute to the literature by focusing on the effect of takeover competition and distinguishing between the returns of first and later bids. Accordingly, we confirm strong relationships between subsequent offers and target firms’ stock returns. These returns increase if a second order is made and if the premium related to the second offer is higher.

Publisher

Walter de Gruyter GmbH

Subject

General Economics, Econometrics and Finance

Link

https://www.degruyter.com/document/doi/10.1515/roe-2023-0058/pdf

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