This paper explores stock price behavior surrounding withdrawn buyout proposals to determine whether managers' proposal announcements reveal any information that is unrelated to the efficiency gains associated with completed buyouts. On average, firms whose managers withdraw buyout proposals do not sustain significantly positive stock price effects unless they receive subsequent acquisition bids. In addition, managers of firms with completed buyouts are no more likely to have access to inside information than managers who withdrew proposals. The author interprets this evidence as inconsistent with the notion that inside information commonly motivates management buyout proposals. Copyright 1992 by American Finance Association.
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Article provided by American Finance Association in its journal Journal of Finance.
Volume (Year): 47 (1992) Issue (Month): 3 (July) Pages: 1061-79 Download reference. The following formats are available: HTML,
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