Merger Bids, Uncertainty, and Stockholder Returns Export

@article{citeulike:3326821, abstract = {n this study, the effect of merger bids on stock returns is investigated. Abnormal stock returns are examined throughout the whole merger process for both successful and unsuccessful merger bids from 480 trading days before a merger bid until 240 trading days after a merger bid. Two merger events are used: the announcement date and the outcome date. Through the use of these data, the stock market's reaction to event uncertainty is explored. The question of whether mergers result in real gains, that is, whether firms are worth more combined than separate, is also considered. The evidence indicates that increases in the probability of merger benefit the stockholders of target firms, and that decreases in the probability of merger injure the stockholders of both target and bidding firms. These results are consistent with the hypothesis that the target firms have unique resources which provide synergy when combined across firms. Most of the gains from a merger go to stockholders of the target firms, with the stockholders of the successful biddings firms earning little if any return, which suggests that the bidder market is competitive and that the source of synergy is unique to the target firms.}, author = {Asquith and Paul}, citeulike-article-id = {3326821}, journal = {Journal of Financial Economics}, keywords = {acquisitions, analysis, bids, company, markets, mathematical, mergers, models, of, offers, prices, rates, return, securities, statistical, stock, stockholders, studies, target, tender, uncertainty}, month = {April}, number = {1-4}, pages = {51--84}, posted-at = {2008-09-24 02:26:44}, priority = {2}, title = {Merger Bids, Uncertainty, and Stockholder Returns}, volume = {11}, year = {1983} }

TY - JOUR ID - citeulike:3326821 L3 - citeulike-article-id:3326821 N2 - n this study, the effect of merger bids on stock returns is investigated. Abnormal stock returns are examined throughout the whole merger process for both successful and unsuccessful merger bids from 480 trading days before a merger bid until 240 trading days after a merger bid. Two merger events are used: the announcement date and the outcome date. Through the use of these data, the stock market's reaction to event uncertainty is explored. The question of whether mergers result in real gains, that is, whether firms are worth more combined than separate, is also considered. The evidence indicates that increases in the probability of merger benefit the stockholders of target firms, and that decreases in the probability of merger injure the stockholders of both target and bidding firms. These results are consistent with the hypothesis that the target firms have unique resources which provide synergy when combined across firms. Most of the gains from a merger go to stockholders of the target firms, with the stockholders of the successful biddings firms earning little if any return, which suggests that the bidder market is competitive and that the source of synergy is unique to the target firms. IS - 1-4 JF - Journal of Financial Economics EP - 84 TI - Merger Bids, Uncertainty, and Stockholder Returns VL - 11 SP - 51 KW - acquisitions KW - analysis KW - bids KW - company KW - markets KW - mathematical KW - mergers KW - models KW - of KW - offers KW - prices KW - rates KW - return KW - securities KW - statistical KW - stock KW - stockholders KW - studies KW - target KW - tender KW - uncertainty AU - Asquith AU - Paul PY - 1983/04// ER -