Bidder returns of small takeovers, payment method and public status

Previous research on event related bidder returns systematically ignored small Mergers and Acquisitions(M&A). This paper uses an event-study methodology to study the effects of a small M&A deal on the stock returns of the bidding firm. These effects are being studied for both the 1981-1992 and 2010-2018 time period to increase comparability with Chang’s (1998) study on large deals and to find results that are indicative for current markets. It is shown that public status, time period, payment method, formation of a new blockholder and relative size of acquisition all have an effect on the bidder returns. In this study’s setting, no evidence was found that showed a significant effect of deal size on the level of event related bidder returns.