IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Hostile versus friendly takeovers

  • Schnitzer,Monika

    (University of Bonn 0; 26,611,511)

The paper analyzes the optimal decision of a raider who can choose between a hostile and a friendly takeover. Empirical evidence shows that the transaction costs of a hostile takeover are much higher than those of a friendly one. The question therefore arises why a raider should ever wish to engage in a hostile takeover. The central argument of the paper rests on the assumption that shareholders have less information about the true value of their firm than the incumbent management. A raider might prefer to make a hostile tender offer directly to the uninformed shareholders rather than negotiating with the informed management even if the transaction costs are higher. The analysis shows furthermore how shareholders can use golden parachutes and poison pills to improve their expected payoffs in a case of takeover.

(This abstract was borrowed from another version of this item.)

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number 339.

in new window

Date of creation: May 1991
Date of revision:
Handle: RePEc:bon:bonsfa:339
Contact details of provider: Postal:
Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany

Fax: +49 228 73 6884
Web page:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bon:bonsfa:339. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (BGSE Office)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.