This paper presents tests of the hypothesis that the relief imposed in antimerger cases is costly for defendant firms' stockholders. Previous research on this subject suggests that defendants' case-related losses are due entirely to legal expenses and the disruption of productive activity. In this paper it is shown that two out of five portfolios of defendant firms earn abnormal losses when final decisions in antimerger cases are announced. These losses are consistent with the imposition of costly constraints on some defendants by government antitrust enforcers. The tests also show that when acquisitions are canceled following antimerger complaints, the losses to the target firms are substantial and completely offset the gains generated when the acquisitions are proposed.

In 1985 the Delaware Supreme Court allowed the Unocal Corporation to make a tender offer for its own shares to all holders except Mesa Partners II, who were attempting to gain control of Unocal. The Unocal decision and Mesa's response are associated with abnormal losses for shareholders of other Delaware firms that appeared to be targets of hostile takeover attempts at the time. These losses suggest that investors believed the decision would increase Delaware managers' ability to resist takeovers to the disadvantage of target shareholders.

This paper investigates how an established borrowing relationship affects the costs associated with initial public offerings of equity. Our model illustrates how the existence of a borrowing relationship reduces the ex ante uncertainty about the value of the issuing firm's equity in the secondary market. If underpricing is related to uncertainty, a borrowing relationship can reduce underpricing. Empirically, we find that, other things equal, IPOs of firms with previously established borrowing relationships are underpriced substantially less than other IPOs.

In this paper the authors examine the effect of competition in the market for bank acquisitions on the acquirers' stock returns. Bank acquisitions are examined because federal and state regulations greatly facilitate the identification of potential bidders and alter native targets in an acquisition. They find that the gain to acquirers is positively related to the number of alternative target firms available and negatively related to the number of other potential bidders. These results provide some insights into the sources of gains from bank acquisitions.