Most acquirers pay an acquisition premium for a target. Upon announcement of the bid, the target's share price increases, on average, so that the share price is the same as the price bid by the acquirer.

Question

Quizplus · Accepted Answer

The target's share price typically increases upon announcement, but it often does not reach the full bid price due to uncertainties about the deal's completion and other market factors.

Most Acquirers Pay an Acquisition Premium for a Target