A rundown of merger target run-ups

Dutordoir, M., Vagenas-Nanos, E. , Verwijmeren, P. and Wu, B. (2021) A rundown of merger target run-ups. Financial Management, 50(2), pp. 487-518. (doi: 10.1111/fima.12331)

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We provide evidence of a drastic drop in stock run‐ups of U.S. target firms preceding merger and acquisition (M+A) announcements over the past decades. The median target run‐up declines from approximately 10% in the 1980s to 2% after 2010. The trend in target run‐ups cannot be fully explained by deal or firm characteristics associated with deal anticipation. However, it disappears after controlling for changes in the strength of U.S. insider trading regulation over the research period. Further analyses corroborate our conclusion that more stringent insider trading regulation is the most likely explanation for the reduction in target run‐ups.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Vagenas-Nanos, Professor Evangelos and Wu, Dr Betty and Verwijmeren, Professor Patrick
Authors: Dutordoir, M., Vagenas-Nanos, E., Verwijmeren, P., and Wu, B.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Financial Management
ISSN (Online):1755-053X
Published Online:06 August 2020
Copyright Holders:Copyright © 2020 Financial Management Association International
First Published:First published in Financial Management 50(2): 487-518
Publisher Policy:Reproduced under a Creative Commons License

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