Identifying the Sources of Gains From Takeovers

In the research literature on UK take-overs there seems to be an appar-ent conundrum. First, it appears that, in general, the market anticipatesoverall equity cash flow gains from a take-over in the sense that theshare price of the acquiree firm typically increases relative to someappropriately market-adjusted benchmark over the period of time fromthe announcement of the take-over to the date when the take-over offeris declared unconditional while the share price of the acquirer firm doesnot decrease over the same period of time