Pre-Bid Acquisitions and Substantial Shareholder Notices

Share price changes of approximately 10–13% are found at the time of the announcement of substantial shareholdings. These price adjustments are interpreted as being consistent with the market reassessing the probability of an impending takeover offer rather than a reassessment of the underlying value of the target firm. Overall, there was little price response for acquiring firms although “raider†firms appeared to be positively revalued.