search query: @author Cornelli, F. / total: 6
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| Author: | Cornelli, F. Li, D. D. |
| Title: | Risk Arbitrage in Takeovers |
| Journal: | Review of Financial Studies
2002 : FALL, VOL. 15:3, p. 837-868 |
| Index terms: | RISK RISK ANALYSIS RISK PREMIUM MERGERS |
| Language: | eng |
| Abstract: | This article studies the role of risk arbitrageurs in takeovers and the source of their advantage. The authors show how the presence of arbitrageurs affects the value of the target shares, since arbitrageurs are more likely to tender. Therefore an arbitrageur has the informational advantage of knowing he bought shares. In equilibrium, the number of arbitrageurs buying shares and the price they pay are determined endogenously. The authors also present several empirical implications, including the relationship among trading volume, takeover premium, liquidity of the shares, and the number of risk arbitrageurs investing in one particular deal. |
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