Takeover Probabilities and the Opportunities for Hedge Funds and Hedge Fund Replication to Produce Abnormal Gains

Anthony Ravi, Peter Mayall and John Simpson

Chapter 4 in Hedge Fund Replication, 2012, pp 48-60 from Palgrave Macmillan

Abstract: Abstract It is important for hedge fund managers and those investors involved in hedge fund replication to recognize that, following the announcement of a takeover offer, empirical marketplace evidence shows that the target’s share price does not always trade at the offered price. If investors are to replicate hedge fund strategies in relation to the pricing of a target in a takeover offer where the target is part of the hedge fund portfolio, it follows that the hedge fund managers must be seen to get the pricing strategy right. This chapter confirms a methodology that has been available to hedge fund managers to fine tune strategy in relation to takeover targets in a hedge fund portfolio, using evidence from Australia.

Keywords: Abnormal Return; Hedge Fund; Retail Investor; Australian Market; Plain Vanilla (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-35831-7_4

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DOI: 10.1057/9780230358317_4

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