Unique equilibrium in a model of takeovers involving block trades and tender offers

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Small shareholders face coordination problems during takeovers. Without common knowledge of a bidder's negotiation ability with an incumbent blockholder in support of a takeover, the probability of takeover success is uniquely determined if the private information available to small shareholders regarding the bidder's negotiation ability is precise enough. An analysis of the unique equilibrium demonstrates that the earmarked freeze-out amount and the expected amount of abnormal returns affect the takeover's outcome. Moreover, the effect of the blockholder's size on the takeover's outcome is determined by the relative size of the earmarked freeze-out amount and the expected amount of abnormal returns.
Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
Issue Date
2015-11
Language
English
Article Type
Article
Keywords

EFFICIENCY

Citation

FINANCE RESEARCH LETTERS, v.15, pp.208 - 214

ISSN
1544-6131
DOI
10.1016/j.frl.2015.09.011
URI
http://hdl.handle.net/10203/205940
Appears in Collection
MT-Journal Papers(저널논문)
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