The biggest wave of takeovers ever to sweep the U.S. is failing to ease investors’ anxieties about rising stock valuations. While a booming market for mergers and acquisitions is often viewed as good for equities, the impact may be diminishing. Caution can be seen in how much the stocks of takeover targets rise the day after deals are announced. In 2015, the average increase is 16 percent, the smallest gain for any year since 2007, according to data compiled by Bloomberg on deals of at least $200 million. Share price reactions are closely tied with the premium companies are willing to offer, which is also at its lowest since 2007. Smaller premiums can be construed as a bearish signal on...
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