Abstract
| Original language | English |
|---|---|
| Pages (from-to) | 45-65 |
| Number of pages | 21 |
| Journal | International Review of Financial Analysis |
| Volume | 9 |
| Issue number | 1 |
| Publication status | Published - 2000 |
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Takeover targets and the probability of bid success: Evidence from the Australian market. / Hutson, Elaine Robyn.
In: International Review of Financial Analysis, Vol. 9, No. 1, 2000, p. 45-65.Research output: Contribution to journal › Article › Research › peer-review
TY - JOUR
T1 - Takeover targets and the probability of bid success: Evidence from the Australian market
AU - Hutson, Elaine Robyn
PY - 2000
Y1 - 2000
N2 - The excess returns earned by takeover targets raises questions of efficiency in the market for corporate control. Brown and Raymond and Samuelson and Rosenthal explain the target share pricing process as a function of the probability of success of the takeover bid. We highlight weaknesses in this work, propose an alternative model, and apply it to 245 Australian takeovers from 1980 to 1993. We find, for targets of successful bids, considerable non-convergence to the bid price. This is consistent with speculative trading models whereby the reduction in dispersion of traders' beliefs leads to the evaporation of market liquidity.
AB - The excess returns earned by takeover targets raises questions of efficiency in the market for corporate control. Brown and Raymond and Samuelson and Rosenthal explain the target share pricing process as a function of the probability of success of the takeover bid. We highlight weaknesses in this work, propose an alternative model, and apply it to 245 Australian takeovers from 1980 to 1993. We find, for targets of successful bids, considerable non-convergence to the bid price. This is consistent with speculative trading models whereby the reduction in dispersion of traders' beliefs leads to the evaporation of market liquidity.
M3 - Article
VL - 9
SP - 45
EP - 65
JO - International Review of Financial Analysis
JF - International Review of Financial Analysis
SN - 1057-5219
IS - 1
ER -