Corpus ID: 174777268

Prior target price changes , risk , and acquirer announcement returns *

  title={Prior target price changes , risk , and acquirer announcement returns *},
  author={T. Moeller and Neeley},
In a large sample of takeovers of public targets, target valuation changes between their 52-week highs and just prior to the acquisition announcements are positively related to acquirer announcement returns. Behavioral biases based on prospect theory can explain this relation. Yet, various proxies for target valuation uncertainty are substantially correlated with the prior target price changes and dominate them in explaining acquirer announcement returns. Risky targets are associated with lower… Expand

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