Merger negotiations with stock market feedback

Research, Preprint OPEN
Betton, Sandra; Eckbo, B. Espen; Thompson, Rex; Thorburn, Karin S.;
  • Publisher: Norwegian School of Economics and Business Administration. Department of Finance and Management Science
  • Subject: Merger negotiations; stock market feedback
    • jel: jel:G00

Merger negotiations routinely occur amidst economically significant a target stock price runups. Since the source of the runup is unobservable (is it a target stand-alone value change and/or deal anticipation?), feeding the runup back into the offer price risks "paying ... View more
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