Journal of Accounting and Finance
This study examines why white knights suffer significant losses while their rival hostile bidders experience significant abnormal gains. We address two research questions: 1) Does the market believe that white knights and hostile bidders are acting in their shareholders' interest? 2) Does Tobin's q explain why white knights suffer significant losses and hostile bidders experience significant gains upon the announcement of their bids? The results show that hostile bidders are value-maximizing investors and white knights are not acting in their shareholders' interest. Instead, white knights suffered significant reductions in value and historically have not maximized the wealth of investors
Original Publication Citation
Griffith, J. M., Najand, M., & Jiancheng, S. (2018). Does the market believe white knights and hostile bidders are acting in their shareholders' interest? Journal of Accounting and Finance, 18(8), 32-45.
Griffith, John M.; Najand, Mohammad; and Shen, Jiancheng, "Does the Market Believe White Knights and Hostile Bidders are acting in Their Shareholders' Interest?" (2018). Finance Faculty Publications. 29.