A Model Identifying Potential Corporate Takeover Candidates

R. Richardson (USA)


Business, Corporate Takeovers, Surveillance, Outlier Technique, Proxy Company


The traditional role of the proxy company has expanded to include a surveillance function to monitor a company's stockholders and identify when a hostile takeover has begun. A model was developed to highlight the trades and stock accumulations that the analyst should investigate. Using twenty-two measures related to price, volume and block trades, an Outlier Test was developed using the Dixon Ratio technique. Test results indicated that an Outlier Model was sufficient to identify the situations that needed further review and reduce the time spent on this task. The twenty percent increase in productivity allowed the analyst to add the monitoring of another corporation to their workload.

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