Price volatility in stocks subject to tender offers

Enduring interest in the market for corporate control stems from its importance in ensuring that assets are managed as efficiently as possible to generate output from the economy’s stock of productive resources. A plethora of empirical studies examining the efficiency of this market in many countries has provided evidence that firms subject to takeover bids experience substantial revaluation. The emphasis of this research has been on the behavior of the level of prices around the announcement of takeover offers, with very few studies examining the price volatility of target companies, and fewer still investigating what happens to trading volume around takeover announcements.