In this article we attempt to identify the nancial characteristics of
takeover targets in UK using the period 1982-1990. The study analyses
the relationship between bidders and targets, and targets and non-targets
over two distinct sub-periods, 1982-1985 and 1986-1990 which are viewed
as being homogenous. The rst period followed a deep recession which
followed a distinct shift in Macroeconomic Policy after 1979. The second
period was associated with nancial liberalisation in 1986 and the freeing
up of Monetary policy that followed the Stock Market Crash in 1987. To
facilitate this analysis, two bi-variate Logit models are estimated over each
sub-period and over the period as a whole. The above models are used
to test whether Merger and Acquisition behaviour has changed by under-
taking a Likelihood Ratio based analogue of the Chow test. A General
Modelling strategy is adopted to select variables as a mechanism for pre-
cluding inconsistency and reducing the impact of collinearity. Comparison
is also made with a semi-parametric estimator
