Affiliation:
1. University of New South Wales. This paper has benefitted from the comments and criticisms of F. Finn and R. Officer. R. Ball's advice and assistance as supervisor for my M.Comm. thesis is gratefully acknowledged. I am also indebted to G. Smith for his assistance with the computer programming. P. Brown offered valuable comments on an earlier draft and also allowed access to the “N=651” version of his Price Relative Data File. The financial support of the Australian Research Grants Committee and the...
Abstract
Stock market prices are investigated around the dates of takeover offers. The 242 companies in the sample of takeover offers are classified firstly as offerors and offerees, and secondly as to whether or not the takeover was achieved. The study employs the two parameter asset pricing model and allows for shifts in risk. Any gains arising from takeovers are won by the acquired firm at the expense of the acquiring firm. The stock market reaction to takeover offers is generally consistent with the Efficient Markets Hypothesis with one notable exception. Alternative interpretations of this anomaly are considered.
Subject
General Business, Management and Accounting
Cited by
43 articles.
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