TY  - JOUR
AU  - Jovanovic,Boyan
AU  - Braguinsky,Serguey
TI  - Bidder Discounts and Target Premia in Takeovers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9009
PY  - 2002
Y2  - June 2002
UR  - http://www.nber.org/papers/w9009
L1  - http://www.nber.org/papers/w9009.pdf
N1  - Author contact info:
Boyan Jovanovic
New York University
Department of Economics
19 W. 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8953
Fax: 212/995-4186
E-Mail: Boyan.Jovanovic@nyu.edu

Serguey Braguinsky
Department of Social and Decision Sciences
and Heinz College,
School of Public Policy and Management
Carnegie Mellon University
Pittsburgh, PA 15213
E-Mail: sbrag@andrew.cmu.edu
AB  - When a takeover is announced, the sum of the stock-market values of the firms involved often falls, and the value of the acquirer almost always does.  Does this mean that takeovers do not raise the values of the firms involved?  Not necessarily.  We set up a model in which the equilibrium number of takeovers is constrained efficient. Yet, upon news of a takeover, a target's price rises, the bidder's price falls, and, most of the time the joint value of the target and acquirer also falls.
ER  -