Takeovers of Privately Held Targets, Methods of Payment, and Bidder Returns

Journal of Finance - Tập 53 Số 2 - Trang 773-784 - 1998
Saeyoung Chang1
1Department of Finance, University of Hawaii

Tóm tắt

ABSTRACTWe examine bidder returns at the announcement of a takeover proposal when the target firm is privately held. In stock offers, bidders experience a positive abnormal return, which contrasts with the negative abnormal return typically found for bidders acquiring a publicly traded target. On the other hand, bidders experience no abnormal return in cash offers. Our analysis suggests that the positive wealth effect is related to monitoring activities by target shareholders and, to an extent, reduced information asymmetries.

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