01075nam a22001097a 4500008004100000022001400041245009100055260003400146300001800180440005500198500071200253190323b        xxu||||| |||| 00| 0 eng d  a0304-405X  aBid anticipation, information revelation, and merger gains / by Wenyu WangcWenyu Wang  aAmsterdambElseviercMay 2018  aPages 320-343  aJournal of Financial Economicsv128 (2)x0304-405X  aAbstract
Because firms’ takeover motives are unobservable to investors, mergers are only partially anticipated and often appear as mixed blessings for acquirers. I construct and estimate a model to study the causes and consequences of bid anticipation and information revelation in mergers. Controlling for the market’s reassessment of the acquirer’s stand-alone value, I estimate that acquirers gain 4% from a typical merger. The total value of an active merger market averages 13% for acquirers, part of which is capitalized in their pre-merger market values. My model also explains the correlation between announcement returns and firm characteristics, as well as the low predictability of mergers.