01/12/2000

The Present Status of Takeover Bids (TOB) and Their Effect on Stock Prices

Keisho Komoto 

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Introduction

Takeover bids (TOBs， also called tender offers) were introduced in Japan under the Securities andExchange Act of 1971， with a major revision occurring in 1990. For the first five to six years after theirintroduction， only two or three takeover bids occurred per year. However， the number has graduallyincreased since 1996， reaching double digits in 1998 (Figure 1). Since last year， the content of takeoverbids has also changed gradually with the unprecedented appearance of several contested TOBs.

In this paper， we give a brief description of TOBs while drawing comparisons with the United States，and examine TOB characteristics in the past decade as well as their impact on stock prices.

 

Keisho Komoto

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