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Optimal toeholds in takeover contests

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  • Goldman, Eitan
  • Qian, Jun
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    Article provided by Elsevier in its journal Journal of Financial Economics.

    Volume (Year): 77 (2005)
    Issue (Month): 2 (August)
    Pages: 321-346

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    Handle: RePEc:eee:jfinec:v:77:y:2005:i:2:p:321-346

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    Web page: http://www.elsevier.com/locate/inca/505576

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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Burch, Timothy R., 2001. "Locking out rival bidders: The use of lockup options in corporate mergers," Journal of Financial Economics, Elsevier, vol. 60(1), pages 103-141, April.
    2. Bates, Thomas W. & Lemmon, Michael L., 2003. "Breaking up is hard to do? An analysis of termination fee provisions and merger outcomes," Journal of Financial Economics, Elsevier, vol. 69(3), pages 469-504, September.
    3. Stulz, ReneM., 1988. "Managerial control of voting rights : Financing policies and the market for corporate control," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 25-54, January.
    4. Agrawal, Anup & Walkling, Ralph A, 1994. " Executive Careers and Compensation Surrounding Takeover Bids," Journal of Finance, American Finance Association, vol. 49(3), pages 985-1014, July.
    5. Benjamin E. Hermalin & Michael S. Weisbach, 1996. "Endogenously Chosen Boards of Directors and Their Monitoring of the CEO," Microeconomics 9602001, EconWPA, revised 09 Oct 1996.
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    7. Hirshleifer, David & Titman, Sheridan, 1990. "Share Tendering Strategies and the Success of Hostile Takeover Bids," Journal of Political Economy, University of Chicago Press, vol. 98(2), pages 295-324, April.
    8. Paul Klemperer & Jeremy Bulow, 1998. "Toeholds and Takeovers," Economics Series Working Papers 1998-W04, University of Oxford, Department of Economics.
    9. Comment, Robert & Jarrell, Gregg A., 1987. "Two-tier and negotiated tender offers: The imprisonment of the free-riding shareholder," Journal of Financial Economics, Elsevier, vol. 19(2), pages 283-310, December.
    10. Jensen, M.C. & Wamer, J.B., 1988. "The Distribution Of Power Among Corporate Managers, Shareholders, And Directors," Papers 88-06, Rochester, Business - Managerial Economics Research Center.
    11. Pound, John, 1987. "The Effects of Antitakeover Amendments on Takeover Activity: Some Direct Evidence," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 353-67, October.
    12. Mikkelson, Wayne H. & Ruback, Richard S., 1985. "An empirical analysis of the interfirm equity investment process," Journal of Financial Economics, Elsevier, vol. 14(4), pages 523-553, December.
    13. Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-88, June.
    14. Robert Comment & G. William Schwert, 1993. "Poison or Placebo? Evidence on the Deterrent and Wealth Effects of Modern Antitakeover Measures," NBER Working Papers 4316, National Bureau of Economic Research, Inc.
    15. Schwert, G. William, 1996. "Markup pricing in mergers and acquisitions," Journal of Financial Economics, Elsevier, vol. 41(2), pages 153-192, June.
    16. Linn, Scott C. & McConnell, John J., 1983. "An empirical investigation of the impact of `antitakeover' amendments on common stock prices," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 361-399, April.
    17. Stulz, Rene M & Walkling, Ralph A & Song, Moon H, 1990. " The Distribution of Target Ownership and the Division of Gains in Successful Takeovers," Journal of Finance, American Finance Association, vol. 45(3), pages 817-33, July.
    18. Ravid, S. Abraham & Spiegel, Matthew, 1999. "Toehold strategies, takeover laws and rival bidders," Journal of Banking & Finance, Elsevier, vol. 23(8), pages 1219-1242, August.
    19. Mikkelson, Wayne H. & Partch, M. Megan, 1989. "Managers' voting rights and corporate control," Journal of Financial Economics, Elsevier, vol. 25(2), pages 263-290, December.
    20. Giammarino, Ronald M & Heinkel, Robert L, 1986. " A Model of Dynamic Takeover Behavior," Journal of Finance, American Finance Association, vol. 41(2), pages 465-80, June.
    21. Denis, David J. & Serrano, Jan M., 1996. "Active investors and management turnover following unsuccessful control contests," Journal of Financial Economics, Elsevier, vol. 40(2), pages 239-266, February.
    22. Hirshleifer, David, 1989. "Facilitation of Competing Bids and the Price of a Takeover Target," University of California at Los Angeles, Anderson Graduate School of Management qt2496649g, Anderson Graduate School of Management, UCLA.
    23. Martin, Kenneth J & McConnell, John J, 1991. " Corporate Performance, Corporate Takeovers, and Management Turnover," Journal of Finance, American Finance Association, vol. 46(2), pages 671-87, June.
    24. Jarrell, Gregg A. & Poulsen, Annette B., 1987. "Shark repellents and stock prices : The effects of antitakeover amendments since 1980," Journal of Financial Economics, Elsevier, vol. 19(1), pages 127-168, September.
    25. Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation : An empirical analysis," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 293-315, January.
    26. Malatesta, Paul H. & Walkling, Ralph A., 1988. "Poison pill securities : Stockholder wealth, profitability, and ownership structure," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 347-376, January.
    27. Rajdeep Singh, 1995. "Takeover Bidding with Toeholds: The Case of the Owner's Curse," Finance 9503001, EconWPA.
    28. Walkling, Ralph A., 1985. "Predicting Tender Offer Success: A Logistic Analysis," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 20(04), pages 461-478, December.
    29. Jennings, Robert H & Mazzeo, Michael A, 1993. "Competing Bids, Target Management Resistance, and the Structure of Takeover Bids," Review of Financial Studies, Society for Financial Studies, vol. 6(4), pages 883-909.
    30. Richard S. Ruback, 1988. "Do Target Shareholders Lose in Unsuccessful Control Contests?," NBER Chapters, in: Corporate Takeovers: Causes and Consequences, pages 137-156 National Bureau of Economic Research, Inc.
    31. Choi, Dosoung, 1991. "Toehold Acquisitions, Shareholder Wealth, and the Market for Corporate Control," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 26(03), pages 391-407, September.
    32. Denis, David J & Denis, Diane K, 1995. " Performance Changes Following Top Management Dismissals," Journal of Finance, American Finance Association, vol. 50(4), pages 1029-57, September.
    33. Assem Safieddine & Sheridan Titman, 1999. "Leverage and Corporate Performance: Evidence from Unsuccessful Takeovers," Journal of Finance, American Finance Association, vol. 54(2), pages 547-580, 04.
    34. Ryngaert, Michael, 1988. "The effect of poison pill securities on shareholder wealth," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 377-417, January.
    35. Chowdhry, Bhagwan & Jegadeesh, Narasimhan, 1994. "Pre-Tender Offer Share Acquisition Strategy in Takeovers," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 29(01), pages 117-129, March.
    36. Officer, Micah S., 2003. "Termination fees in mergers and acquisitions," Journal of Financial Economics, Elsevier, vol. 69(3), pages 431-467, September.
    37. Bradley, Michael & Desai, Anand & Kim, E. Han, 1988. "Synergistic gains from corporate acquisitions and their division between the stockholders of target and acquiring firms," Journal of Financial Economics, Elsevier, vol. 21(1), pages 3-40, May.
    38. Betton, Sandra & Eckbo, B Espen, 2000. "Toeholds, Bid Jumps, and Expected Payoffs in Takeovers," Review of Financial Studies, Society for Financial Studies, vol. 13(4), pages 841-82.
    39. Sanford J. Grossman & Oliver D. Hart, 1980. "Takeover Bids, the Free-Rider Problem, and the Theory of the Corporation," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 42-64, Spring.
    40. Burkart, Mike, 1995. " Initial Shareholdings and Overbidding in Takeover Contests," Journal of Finance, American Finance Association, vol. 50(5), pages 1491-1515, December.
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    Citations

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    Cited by:
    1. Gino Loyola, 2008. "Optimal takeover contests with toeholds," Economics Working Papers we083217, Universidad Carlos III, Departamento de Economía.
    2. Carroll, Carolyn & Griffith, John M., 2010. "Toeholds, rejected offers, and bidder gains: Do rebuffed bidders put targets in play to profit from their toeholds?," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(2), pages 214-221, May.
    3. Frank Stähler, 2014. "Partial ownership and cross-border mergers," Journal of Economics, Springer, vol. 111(3), pages 209-237, April.
    4. Akhigbe, Aigbe & Martin, Anna D. & Whyte, Ann Marie, 2007. "Partial acquisitions, the acquisition probability hypothesis, and the abnormal returns to partial targets," Journal of Banking & Finance, Elsevier, vol. 31(10), pages 3080-3101, October.
    5. Back, Kerry E. & Li, Tao & Ljungqvist, Alexander P., 2013. "Liquidity and Governance," CEPR Discussion Papers 9739, C.E.P.R. Discussion Papers.
    6. Bargeron, Leonce L., 2012. "Do Shareholder Tender Agreements inform or expropriate shareholders?," Journal of Corporate Finance, Elsevier, vol. 18(2), pages 373-388.
    7. Eckbo, B. Espen, 2009. "Bidding strategies and takeover premiums: A review," Journal of Corporate Finance, Elsevier, vol. 15(1), pages 149-178, February.
    8. Kisgen, Darren J. & "QJ" Qian, Jun & Song, Weihong, 2009. "Are fairness opinions fair? The case of mergers and acquisitions," Journal of Financial Economics, Elsevier, vol. 91(2), pages 179-207, February.
    9. Loyola, Gino, 2012. "Optimal and efficient takeover contests with toeholds," Journal of Financial Intermediation, Elsevier, vol. 21(2), pages 203-216.
    10. Loyola, Gino, 2012. "Auctions vs. negotiations in takeovers with initial stakes," Finance Research Letters, Elsevier, vol. 9(3), pages 111-120.
    11. Bruno-Laurent Moschetto & Frédéric Teulon, 2014. "Optimisation d’une stratégie anti-OPA par limitation linéaire des droits de vote face à un investisseur hostile," Working Papers 2014-410, Department of Research, Ipag Business School.
    12. Amélie Charles & Olivier Darné & Jae H. Kim & Etienne Redor, 2014. "Stock Exchange Mergers and Market Efficiency," Working Papers hal-00940105, HAL.
    13. Povel, Paul & Sertsios, Giorgo, 2014. "Getting to know each other: The role of toeholds in acquisitions," Journal of Corporate Finance, Elsevier, vol. 26(C), pages 201-224.
    14. Betton, Sandra & Eckbo, B. Espen & Thorburn, Karin S., 2009. "Merger negotiations and the toehold puzzle," Journal of Financial Economics, Elsevier, vol. 91(2), pages 158-178, February.
    15. Taras Banakh & Pavel Trisch, 2012. "Toehold Purchase Problem: A comparative analysis of two strategies," Papers 1204.2065, arXiv.org, revised Aug 2013.

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