Три пути ведут к знанию: путь размышления - это путь самый благородный, путь подражания - это путь самый легкий и путь опыта - это путь самый горький.
Конфуций
Do managers time the stock market in makingtakeovers? This dissertation examines the theory ofstock market driven acquisitions in explainingperformance of mergers and acquisitions. Examiningstock returns and financial performance, thepredictions of this theory are tested on a sample ofCanadian firms (1994-2000). Findings show that Canadian acquirers using stockdeals suffer significant negative 36-monthperformance measured by a market model, a marketadjusted model and an accounting return model. Thesefindings support the theory's prediction of negativereturns. Weak support is found for the prediction ofpositive returns for cash acquirers. There is supportfor the theory's prediction of better returns forcash acquirers than stock acquirers. Target companiesexperience post-merger gains that last in the shortterm as predicted. Over-valuation of acquirers usingstock payment does suffer negative long termperformance. Poorer performance is not found inovervaluation of cash acquirers. Overall, this studyconcludes from a range of evidence in Canada thatindeed managers could be motivated by overvaluedstock prices in making takeovers.