Management Motive, Shareholder Returns, and the Choice of Payment: Evidence from the UK Available to Purchase

Prior studies have reported mixed findings regarding bidder shareholder returns. There are many theories regarding the motivation towards the initiation of a takeover. This study intends to analyze four major merger motivations separately and examine the impact each has on bidder returns. We find the market reacts according to the nature of the takeover and the underlying motive behind the bid.