Anticipation, Acquisitions, and Bidder Returns: Industry Shocks and the Transfer of Information across Rivals

• 成果类型: Article
• 署名作者: Cai, Jie; Song, Moon H.; Walkling, Ralph A.
• 署名单位: Drexel University; California State University System; San Diego State University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhr035
• 发表日期: 2011
• 页码: 2242
• 关键词: EARLY-MOVER ADVANTAGES; Abnormal returns; CORPORATE ACQUISITIONS; acquiring firms; MERGER ACTIVITY; tender offers; BIDDING FIRMS; MARKET; takeover; gains

摘要

We document market anticipation of merger bids and show that less anticipated bids earn significantly higher announcement returns. Subsequent bidders in the industry experience significant and positive abnormal returns around the time of initial industry bid announcements. These results suggest that announcement period returns underestimate the wealth effects of bidding. After accounting for anticipation, bidding activity is, on average, a significant wealth-creating event. Moreover, bidders pursuing public targets increase shareholder wealth and bidders in stock swaps do not lose. These results contradict conventional wisdom. Our results shed light on the correct magnitude of acquisition returns and on the transfer of information throughout an industry around the time of an economic shock. (JEL G34, G14)