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International Conference on Engineering and Business Management (EBM 2010 PAPERBACK)

Chengdu,China,China,3.24-3.26,2010

ISBN: 978-1-935068-05-1 Scientific Research Publishing, USA

Paperback 6066pp Pub. Date: March 2010

Category: Engineering

Price: $280

Title: Arbitrage Strategy of Centralized Bidding Acquisition-----vidence from China
Source: International Conference on Engineering and Business Management (EBM 2010 PAPERBACK) (pp 1534-1538)
Author(s): Jinxin ZHANG, School of Economics and Management, Beijing Jiaotong University, Beijing, China
Xiaowei WU, School of Economics and Management, Beijing Jiaotong University, Beijing, China
Jason TUAN, School of Economics and Management, Beijing Jiaotong University, Beijing, China
Abstract: Abstract: Once announcement about centralized bidding acquisition is disclosed, involved stocks often abnormally rise, which provide a chance for arbitragers to arbitrage with suitable investment strategies. This paper explores market reaction to bided listed companies for the period between 1993 and 2008. Our result reveals that bidding announcement contributes to significant positive market reaction; further initial bidding announcement has better profit than non-initial announcement. But profit of strategic investment style has no difference from financial investment style. Our finding implies an arbitrage strategy with average period abnormal return of 5.2%, which is buying on the day of bidding announcement and holding 23 deal days.
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