18 Pages Posted: 24 Sep 2008 Last revised: 30 Jul 2011
Date Written: July 28, 2011
For a sample of successful tender offers, we find that the shareholders of high q bidders gain significantly more than the shareholders of low q bidders. In general, the shareholders of low q targets benefit more from takeovers than the shareholders of high q targets. Typical bidders have persistently low q ratios prior to the acquisition announcement while target q ratios decline significantly over the five years before the tender offer. Our results are consistent with the view that takeovers of poorly managed targets by well-managed bidders have higher bidder, target, and total gains.
Suggested Citation: Suggested Citation
Lang, Larry H.P. and Walkling, Ralph A. and Stulz, René M., Managerial Performance, Tobin's Q, and the Gains from Successful Tender Offers (July 28, 2011). Journal of Finance, Vol. 24, pp. 137-154, 1989 . Available at SSRN: https://ssrn.com/abstract=918043