The returns to bidding firms in corporate takeovers: splitting up the pie
In this paper, we examined the impact of ownership concentration in target firms on the returns to shareholders of bidding firms. In this research, we found that shareholders of bidding earn statistically significant positive abnormal returns surrounding takeover announcements. In addition, we found bidder returns of 4% over the event-window [−20, +20]. We showed that the degree of ownership concentration in target firms – measured by the Herfindahl-concentration index – significantly and positively affects the returns to bidding firms. These findings are consistent with the predictions of Grossman and Hart (1980), Bagnoli and Lipman (1988) and Holmstrom and Nalebuff (1992) takeover models.
Volume (Year): 1 (2009)
Issue (Month): 4 ()
|Contact details of provider:|| Web page: http://www.inderscience.com/browse/index.php?journalID=277|
When requesting a correction, please mention this item's handle: RePEc:ids:injbaf:v:1:y:2009:i:4:p:340-357. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Darren Simpson)
If references are entirely missing, you can add them using this form.