Takeover bids: evidence from the Portuguese market

Throughout the nineties, a number of tender offers occurred in the Portuguese market. This article employs event study methodology to investigate their effects on the involved firms shareholders. On average, these operations increased the market value of the involved firms by 2% to 3%. However, target shareholders appropriated most of this gain, earning 18% over their firms previous value, whereas bidder shareholders seem to have gained nothing. These averages bent in bidders shareholders favour, however, when bidders held significant positions in the targets capital before the bid.Received: December 2002, Accepted: September 2003, JEL Classification: G14, G34This paper corresponds to a revised version of chapter 6 of my PhD dissertation. I have greatly benefited from comments by my supervisors José Manuel Amado da Silva and Victor Mendes dos Santos, Pedro Pita Barros, participants in the 9^o Encontro Nacional de Economia Industrial and in an internal seminar at the Faculdade de Economia e Gestão, and two anonymous referees. The responsibility for any remaining errors is, of course, exclusively mine. CMVM and BDP have kindly provided the data used. Grant PRAXIS/PCSH/C/CEG/30/96 partially supported this research.