RISK ARBITRAGE IN TENDER OFFERS - HANDSOME REWARDS - AND NOT FOR INSIDERS ONLY

This article provides evidence that investors can earn significant excess returns in the process of risk arbitrage in tender offer markets. Using publicly available information, the authors provide empirical evidence that risk arbitrageurs can earn significant excess returns when target shares are purchased on the day of the announcement of the takeover intent, and sold (or tendered) on the resolution date of the offer.