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Controlling Shareholders and the Acquisition Premiums Paid in European Takeover Bids

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  • M.F. Thraya

    (CERAG - Centre d'études et de recherches appliquées à la gestion - UPMF - Université Pierre Mendès France - Grenoble 2 - CNRS - Centre National de la Recherche Scientifique)

  • J. Hagendorff

    (Edin. - University of Edinburgh)

Abstract

This paper examines the incentives of controlling shareholders in the market for corporate control. We investigate the takeover premiums paid by a sample of European acquiring firms with concentrated voting rights structures. The results show a positive relationship between takeover premiums and the bidder's concentration of both voting rights and excess voting rights over cash-flow rights. With higher levels of bidder entrenchment, the valuation of a takeover target increasingly reflects the private benefits of control which bidders seek to extract from a deal

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  • M.F. Thraya & J. Hagendorff, 2010. "Controlling Shareholders and the Acquisition Premiums Paid in European Takeover Bids," Post-Print halshs-00534763, HAL.
    • Handle: RePEc:hal:journl:halshs-00534763
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00534763
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    References listed on IDEAS

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    1. Himmelberg, Charles P. & Hubbard, R. Glenn & Palia, Darius, 1999. "Understanding the determinants of managerial ownership and the link between ownership and performance," Journal of Financial Economics, Elsevier, vol. 53(3), pages 353-384, September.
    2. Luigi Zingales, 1995. "Insider Ownership and the Decision to Go Public," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(3), pages 425-448.
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    Keywords

    Controlling shareholders; separation between the ownership and the control; takeover premiums; private benefits;
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