ABSTRACT This paper examines movements in the prices of target stocks as predictors of the ultimate success or failure of tender offers. An empirical investigation of 100% cash tender offers during the years 1976 to 1981 leads to the conclusion that, with few exceptions, market prices are well‐calibrated, i.e., the current target price during the offer period measures the expected (discounted) stock price at the conclusion date. The market's probability predictions improve monotonically over time.