Hostile versus friendly takeovers
AbstractThe paper analyses the choice of a raider between a hostile and a friendly takeover. If the target companyâs manager has private information about the scope for efficiency gains, it is shown that the raider may prefer a hostile acquisition even if transaction costs for a friendly takeover are much smaller. The raider actually chooses between a (hostile) tender offer to uninformed shareholders and (friendly) merger negotiations with the informed manager. I show how the uncertainty about potential efficiency gains, the managerâs preference for control, the number of shares held by the manager and transaction costs affect the raiderâs choice.
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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number 339.
Date of creation: May 1991
Date of revision:
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Other versions of this item:
- Monika Schnitzer, . "Hostile Versus Friendly Takeovers," Discussion Paper Serie A 297, University of Bonn, Germany.
- Schnitzer,Monika, 1990. "Hostile versus friendly takeovers," Discussion Paper Serie A 299, University of Bonn, Germany.
- Schnitzer, Monika, 1996. "Hostile versus friendly takeovers," Munich Reprints in Economics 19895, University of Munich, Department of Economics.
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- Dickerson, Andrew P. & Gibson, Heather D. & Tsakalotos, Euclid, 2002.
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- Ralph P. Heinrich, 1999. "Complementarities in Corporate Governance. A Survey of the Literature with Special Emphasis on Japan," Kiel Working Papers 947, Kiel Institute for the World Economy.
- Mohd, Irfan, 2010. "The Role of Executives in Hostile Takeover Attempts," MPRA Paper 22123, University Library of Munich, Germany, revised 15 Apr 2010.
- Mohd Irfan, 2011. "The role of executives in hostile takeover attempts," Journal of Economic Interaction and Coordination, Springer, vol. 6(1), pages 29-40, May.
- Moez Souissi & Pierre Lasserre, 2007. "It Takes Two to Tango. La fusion : exercice de deux options réelles," Économie et Prévision, Programme National Persée, vol. 178(2), pages 51-65.
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