Abstract
The predictability of the opinions provided in expert reports produced in Australian takeovers has led repeatedly to public criticism. This study assesses the validity of this criticism by comparing expert valuations with the recommendations of target firm directors. The results indicate that expert valuations typically agree with directors' recommendations, with the rate of agreement being 95% for reject recommendations. Consistent with expert valuations provided in rejected takeovers being inflated, these bids are associated with similar premiums to accepted bids. Additionally, rejected offers that succeed do so at well below the expert̂s valuation, and prices in unsuccessful rejected offers do not increase towards the expert̂s valuation.
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