search query: @indexterm Insider trading / total: 155
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| Author: | Schwert, G. W. |
| Title: | Markup pricing in mergers and acquisitions |
| Journal: | Journal of Financial Economics
1996 : JUN, VOL. 41:2, p. 153-192 |
| Index terms: | MERGERS INSIDER TRADING SHARE PRICES |
| Language: | eng |
| Abstract: | This paper studies the relation between the premiums in takeover bids involving exchange-listed target firms from 1975-91 and the pre-announcement stock price runups. The evidence shows that the pre-bid runup and the post-announcement increase in the target's stock price (the "markup") are generally uncorrelated. With little substitution between the runup and the markup, the runup is an added cost to the bidder. This finding has important implications for assessing the costs of insider trading. It also raises interesting questions about the role of information from public capital markets in private takeover negotiations. |
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