CORPORATE TAKEOVERS: EXCESS RETURNS AND THE MULTIPLE BIDDING PHENOMENA.

The paper compares the returns to acquired firms in single and multiple bidder acquisitions. Immediately after the announcement of the first bid, the mean abnormal returns accumulated by targets acquired in single bid acquisitions (SBAs) and multiple bid acquisitions (MBAs) are not statistically different. However, following the announcement of the second bid, there are evident differences, with the targets acquired in MBAs exhibiting significantly higher abnormal returns. This precludes the commonly accepted rational competitive acquisition hypothesis as a potential explanation of the results. Thus, the second bidder in multiple bidder situations most likely does not join the bidding as a result of observing an unusually low first bid. [ABSTRACT FROM AUTHOR]