Wealth Reduction in White Knight Bids
The paper investigates the value changes experienced by white knights when they are involved in corporate control contests. Close to 80% of the white knights incur a negative abnormal return for the two-day window ending on the date of their bid. The losses persist for longer windows on either side of the event. We examine a set of matched-trios where all parties to the control contest are exchange-listed, and observe that from a welfare economics perspective, these contests do not lead to Pareto superior states, but meet the weaker efficiency criterion of the Hicks-Kaldor compensation principle.
Year of publication: |
1992
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Authors: | Banerjee, Ajeyo ; Owers, James E. |
Published in: |
Financial Management. - Financial Management Association - FMA. - Vol. 21.1992, 3
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Publisher: |
Financial Management Association - FMA |
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