Merger bids, uncertainty, and stockholder returns

  • Asquith P
  • 182


    Mendeley users who have this article in their library.
  • 390


    Citations of this article.


This study investigates the effect of merger bids on stock returns. Abnormal stock returns are examined throughout the entire merger process for both successful and unsuccessful merger bids. The evidence shows that increases in the probability of merger benefit the stockholders of target firms, and that decreases in the probability of merger harm the stockholders of both target and bidding firms. There is also evidence that the stock market forecasts probable merger targets in advance of any merger announcement, and because of this, previous studies have underestimated the market's reaction to merger bids. © 1983.

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document


  • Paul Asquith

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free