(Lethbridge, Alta. : University of Lethbridge, Faculty of Management, 2004, 2004) Feng, Hao; University of Lethbridge. Faculty of Management; Torabzadeh, Khalil
This study is to determine whether there is an association between takeover rumors and the prices paid by the acquiring banks for the target banks subject to prior takeover rumors in successful acquisitions. A sample of 512 U.S. bank mergers from 1991 to 2003 is examined. The results show takeover rumors have a significant positive impact on moving up the target banks’ stock price and other factors, such as total asset of the target bank, bank type and method of payment, can also induce the acquiring banks to pay more for such rumored target banks compared to those targets with no prior takeover speculations.