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Analyst Behavior Surrounding Tender Offer Announcements


  • Daniel J. Bradley
  • Angela G. Morgan
  • Jack G. Wolf


We examine the usefulness and credibility of analyst recommendations by focusing on their behavior surrounding tender offer announcements. For our 1998-2001 sample, we find analysts did not identify takeover targets through their recommendations nor did they distinguish between wealth-increasing and wealth-decreasing tender offers. We find some evidence of conflicts of interest in analyst recommendations, but it is confined to the 1999-2000 dot-com period. However, the long-run performance following recommendations suggests that these conflicts have little ultimate cost to investors. 2007 The Southern Finance Association and the Southwestern Finance Association.

Suggested Citation

  • Daniel J. Bradley & Angela G. Morgan & Jack G. Wolf, 2007. "Analyst Behavior Surrounding Tender Offer Announcements," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 30(1), pages 1-19.
  • Handle: RePEc:bla:jfnres:v:30:y:2007:i:1:p:1-19

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    References listed on IDEAS

    1. Alexander H. Sarris, 1973. "A Bayesian Approach To Estimation Of Time-Varying Regression Coefficients," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 2, number 4, pages 501-523 National Bureau of Economic Research, Inc.
    2. Vasicek, Oldrich A, 1973. "A Note on Using Cross-Sectional Information in Bayesian Estimation of Security Betas," Journal of Finance, American Finance Association, vol. 28(5), pages 1233-1239, December.
    3. Rosenberg, Barr & McKibben, Walt, 1973. "The Prediction of Systematic and Specific Risk in Common Stocks," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 8(02), pages 317-333, March.
    4. Dana J. Johnson & Richard E. Bennett & Richard J. Curcio, 1979. "A Note On The Deceptive Nature Of Bayesian Forecasted Betas," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 2(1), pages 65-69, March.
    5. Barr Rosenberg, 1973. "A Survey of Stochastic Parameter Regression," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 2, number 4, pages 381-397 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Chang, Chih-Hsiang & Chan, Kam C., 2011. "Investment banks' stock ratings, call warrant issuance, and responses from heterogeneous investors: Evidence from Taiwan," International Review of Economics & Finance, Elsevier, vol. 20(4), pages 733-743, October.
    2. Gerritsen, Dirk F., 2015. "Security analysts’ target prices and takeover premiums," Finance Research Letters, Elsevier, vol. 13(C), pages 205-213.

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