Multiple Bids, Management Opposition, and the Market for Corporate Control.

We use regression analysis to disentangle the wealth effect for acquired firm shareholders of management opposition and multiple bids (e.g., multiple bidders and bid revisions). Although multiple bidders and bid revisions occur more frequently for opposed acquisitions, opposition is not associated with incremental acquisition returns for acquisitions with multiple bidders. We also find that management opposition has no significant incremental effect on single bidder acquisitions unless the acquiring firm revises its initial bid. These findings indicate that rather than amplifying acquisition returns directly, management opposition instead serves as a negotiating tool to solicit additional bids. Copyright 2000 by MIT Press.