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Abnormal Returns from Merger Profiles

Published online by Cambridge University Press:  06 April 2009

James W. Wansley ,
Rodney L. Roenfeldt  and
Philip L. Cooley
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Extract

Several studies indicate the presence of large abnormal returns accruing to shareholders of merged firms in the period immediately before the merger. For example, Mandelker [18] reports that stockholders of acquired firms earn abnormal returns of approximately 14 percent in the seven months preceding merger. Franks, Broyles, and Hecht [15] find abnormal returns of 26 percent for British firms during the four months prior to merger; Elgers and Clark [11] report 43 percent abnormal returns accruing over two years before merger to shareholders of acquired firms.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 18 , Issue 2 , June 1983 , pp. 149 - 162
Copyright
Copyright © School of Business Administration, University of Washington 1983

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