This paper provides empirical evidence concerning share price performance of both the target and the bidder prior to the public announcement of a merger bid and the inferences which may be made concerning insider dealing, share rigging and the leakage of information associated with advising merchant banks. It is found that almost 75% of the rise in the share price of a target arising from a bid occurs before its announcement. When this is analysed between bidders' advising merchant banks, it is found that this occurs significantly earlier in the case of two major firms - suggesting their association with it. The implications of the empirical study for stock market regulation are discussed.
|Number of pages||9|
|Journal||Applied Financial Economics|
|Publication status||Published - Aug 1996|