On average, when a bid is announced, the share price of the target rises.

Question

Quizplus · Accepted Answer

This is known as the "merger premium" – the increase in the share price of the target company due to the announcement of a bid or offer from another company. The premium is often a reflection of the potential value of the target company and its future growth prospects if the merger or acquisition goes ahead. However, there can be many factors that influence the share price movement, and it's not always a guarantee that it will rise.

On Average, When a Bid Is Announced, the Share Price