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Takeover Bids and the Relative Prices of Shares that Differ in their Voting Rights


  • Kristian Rydqvist


The paper models the relative prices of shares that differ only in their voting rights. The voting premium is derived as a function of the probability of takeover. We analyse how the voting premium is determined by the relative efficiency of the rival, the share structure, and by ownership concentration. The optimal share and ownership structures are derived.

Suggested Citation

  • Kristian Rydqvist, 1992. "Takeover Bids and the Relative Prices of Shares that Differ in their Voting Rights," CEPR Financial Markets Paper 0017, European Science Foundation Network in Financial Markets, c/o C.E.P.R, 77 Bastwick Street, London EC1V 3PZ..
  • Handle: RePEc:cpr:ceprfm:0017

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    References listed on IDEAS

    1. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
    2. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Oxford University Press, vol. 51(3), pages 393-414.
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    Cited by:

    1. Gardiol, Lucien & Gibson-Asner, Rajna & Tuchschmid, Nils S., 1997. "Are liquidity and corporate control priced by shareholders? Empirical evidence from Swiss dual class shares," Journal of Corporate Finance, Elsevier, vol. 3(4), pages 299-323, December.
    2. Bruner, Robert F., 1999. "An analysis of value destruction and recovery in the alliance and proposed merger of Volvo and Renault," Journal of Financial Economics, Elsevier, vol. 51(1), pages 125-166, January.
    3. repec:dau:papers:123456789/9321 is not listed on IDEAS


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