A Re‐Examination of the Market Reaction to Failed Mergers

WALLACE N. DAVIDSON; DIPA DUTIA; Tsz Wan Cheng

doi:10.1111/j.1540-6261.1989.tb02640.x

A Re‐Examination of the Market Reaction to Failed Mergers

WALLACE N. DAVIDSON, DIPA DUTIA, Tsz Wan Cheng

Research output: Journal article publication › Journal article › Academic research › peer-review

26 Citations (Scopus)

Abstract

This study examines the revaluation of shares surrounding the cancellation of mergers over the years 1976–1985. The results are first categorized according to the party cancelling the merger and then by subsequent merger activity. The results are as expected: target firms that become involved in merger activity, subsequent to the cancellation, experience positive cumulative prediction errors (CPEs). Targets that do not become involved in subsequent merger activity have CPEs that return to pre‐merger announcement levels. These results do not vary when bidders or targets cancel the merger. 1989 The American Finance Association

Original language	English
Pages (from-to)	1077-1083
Number of pages	7
Journal	The Journal of Finance
Volume	44
Issue number	4
DOIs	https://doi.org/10.1111/j.1540-6261.1989.tb02640.x
Publication status	Published - 1 Jan 1989

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

More information

10.1111/j.1540-6261.1989.tb02640.x

Cite this

@article{537aaf8fac344509ad9b50e8a42c0c8e,

title = "A Re‐Examination of the Market Reaction to Failed Mergers",

abstract = "This study examines the revaluation of shares surrounding the cancellation of mergers over the years 1976–1985. The results are first categorized according to the party cancelling the merger and then by subsequent merger activity. The results are as expected: target firms that become involved in merger activity, subsequent to the cancellation, experience positive cumulative prediction errors (CPEs). Targets that do not become involved in subsequent merger activity have CPEs that return to pre‐merger announcement levels. These results do not vary when bidders or targets cancel the merger. 1989 The American Finance Association",

author = "DAVIDSON, {WALLACE N.} and DIPA DUTIA and Cheng, {Tsz Wan}",

year = "1989",

month = jan,

day = "1",

doi = "10.1111/j.1540-6261.1989.tb02640.x",

language = "English",

volume = "44",

pages = "1077--1083",

journal = "The Journal of Finance",

issn = "0022-1082",

publisher = "Wiley-Blackwell Publishing Ltd",

number = "4",

}

TY - JOUR

T1 - A Re‐Examination of the Market Reaction to Failed Mergers

AU - DAVIDSON, WALLACE N.

AU - DUTIA, DIPA

AU - Cheng, Tsz Wan

PY - 1989/1/1

Y1 - 1989/1/1

N2 - This study examines the revaluation of shares surrounding the cancellation of mergers over the years 1976–1985. The results are first categorized according to the party cancelling the merger and then by subsequent merger activity. The results are as expected: target firms that become involved in merger activity, subsequent to the cancellation, experience positive cumulative prediction errors (CPEs). Targets that do not become involved in subsequent merger activity have CPEs that return to pre‐merger announcement levels. These results do not vary when bidders or targets cancel the merger. 1989 The American Finance Association

AB - This study examines the revaluation of shares surrounding the cancellation of mergers over the years 1976–1985. The results are first categorized according to the party cancelling the merger and then by subsequent merger activity. The results are as expected: target firms that become involved in merger activity, subsequent to the cancellation, experience positive cumulative prediction errors (CPEs). Targets that do not become involved in subsequent merger activity have CPEs that return to pre‐merger announcement levels. These results do not vary when bidders or targets cancel the merger. 1989 The American Finance Association

UR - http://www.scopus.com/inward/record.url?scp=84977701673&partnerID=8YFLogxK

U2 - 10.1111/j.1540-6261.1989.tb02640.x

DO - 10.1111/j.1540-6261.1989.tb02640.x

M3 - Journal article

SN - 0022-1082

VL - 44

SP - 1077

EP - 1083

JO - The Journal of Finance

JF - The Journal of Finance

IS - 4

ER -

A Re‐Examination of the Market Reaction to Failed Mergers

Abstract

ASJC Scopus subject areas

More information

Other files and links

Fingerprint

Cite this