Abstract
This study empirically examines the impact of changes in substantial shareholdings ahead of 450 Australian takeover offers between the years 2000 and 2009. Previous studies have attributed a significant proportion of the price run-up effect in takeover targets to insider-trading behaviour. This study examines the contribution of a broad range of public information sources that are known to typically generate market anticipation, including the acquisition of toeholds ahead of takeover announcements. Our findings show no significant pre-bid run-up for takeover targets after considering these sources. We conclude from these results that previous findings attributing pre-bid share price run-up to illegal insider trading may overstate the existence of such conduct.
| Original language | English |
|---|---|
| Pages (from-to) | 25-45 |
| Number of pages | 21 |
| Journal | Accounting and Finance |
| Volume | 54 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Mar 2014 |
Keywords
- Insider trading
- Market anticipation
- Market efficiency
- Substantial shareholder notices
- Takeovers
- Toeholds