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Does insider trading explain price run-up ahead of takeover announcements?

Journal Article


Abstract


  • This study empirically examines the impact of changes in substantial

    shareholdings ahead of 450 Australian takeover offers between the years 2000

    and 2009. Previous studies have attributed a significant proportion of the price

    run-up effect in takeover targets to insider-trading behaviour. This study

    examines the contribution of a broad range of public information sources that

    are known to typically generate market anticipation, including the acquisition of

    toeholds ahead of takeover announcements. Our findings show no significant

    pre-bid run-up for takeover targets after considering these sources.We conclude

    from these results that previous findings attributing pre-bid share price run-up

    to illegal insider trading may overstate the existence of such conduct.

Authors


  •   Aspris, Angelo (external author)
  •   Foley, Sean (external author)
  •   Frino, Alex

Publication Date


  • 2014

Citation


  • Aspris, A., Foley, S. & Frino, A. (2014). Does insider trading explain price run-up ahead of takeover announcements?. Accounting and Finance, 54 (1), 25-45.

Scopus Eid


  • 2-s2.0-84894716579

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/1328

Number Of Pages


  • 20

Start Page


  • 25

End Page


  • 45

Volume


  • 54

Issue


  • 1

Place Of Publication


  • Australia

Abstract


  • This study empirically examines the impact of changes in substantial

    shareholdings ahead of 450 Australian takeover offers between the years 2000

    and 2009. Previous studies have attributed a significant proportion of the price

    run-up effect in takeover targets to insider-trading behaviour. This study

    examines the contribution of a broad range of public information sources that

    are known to typically generate market anticipation, including the acquisition of

    toeholds ahead of takeover announcements. Our findings show no significant

    pre-bid run-up for takeover targets after considering these sources.We conclude

    from these results that previous findings attributing pre-bid share price run-up

    to illegal insider trading may overstate the existence of such conduct.

Authors


  •   Aspris, Angelo (external author)
  •   Foley, Sean (external author)
  •   Frino, Alex

Publication Date


  • 2014

Citation


  • Aspris, A., Foley, S. & Frino, A. (2014). Does insider trading explain price run-up ahead of takeover announcements?. Accounting and Finance, 54 (1), 25-45.

Scopus Eid


  • 2-s2.0-84894716579

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/1328

Number Of Pages


  • 20

Start Page


  • 25

End Page


  • 45

Volume


  • 54

Issue


  • 1

Place Of Publication


  • Australia