Stock price fluctuations in periods of corporate acquisition and control: A new outlook for the board of directors

Abstract

This paper rummages the stock price fluctuations in periods of corporate acquisition and control. The paper became pertinent to provide information to the corporate board of directors and investors to improve decision making by understanding the inherent fluctuations and the concomitant uncertainties during periods of corporate acquisitions and control negotiations. The main aim of the paper is to examine if there is a significant difference in stock price fluctuation before and during periods of corporate acquisition. The methodological approach is quantitative and used the statistical T-test of difference in mean stock price differences before and during periods of SABMiller acquisition. It also applied the cointegration analysis to establish a correlation in stock price between the acquiring company and the company under acquisition. The analysis was tested at an alpha of 0.05 and results from the statistical analysis disclosed a significant difference to the degree of P