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Anchoring in Takeovers Under Mandatory Bid Rule: Evidence From an Emerging Market

Author

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  • Adrian Pop

    (Faculté de Droit, Economie et Gestion de l’université d’Angers., GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

  • Diana Pop

    (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

Abstract

This article documents the existence of an anchoring bias in the pricing and acceptance of takeover bids in a blockholder regime where the mandatory bid rule applies. Our analysis, performed on the Romanian market for corporate control, shows that the 52‐week high price of the target and the pricing of direct privatisations conducted by the government are strong predictors of both bid premium and outcome. The tender decision depends also on the scope of expropriation perceived by minority shareholders. Our results suggest that stronger capital market discipline is also important for insuring an effective protection of minority shareholders.

Suggested Citation

  • Adrian Pop & Diana Pop, 2025. "Anchoring in Takeovers Under Mandatory Bid Rule: Evidence From an Emerging Market," Post-Print hal-05067197, HAL.
    • Handle: RePEc:hal:journl:hal-05067197
    DOI: 10.1111/ecot.12451
    Note: View the original document on HAL open archive server: https://univ-angers.hal.science/hal-05067197v1
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    References listed on IDEAS

    as
    1. Marshall, Ben R. & Anderson, Hamish D., 2009. "Regulation and target takeover returns: Is there a link?," Pacific-Basin Finance Journal, Elsevier, vol. 17(4), pages 395-412, September.
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    4. repec:dau:papers:123456789/12532 is not listed on IDEAS
    5. Wang, Ying & Lahr, Henry, 2017. "Takeover law to protect shareholders: Increasing efficiency or merely redistributing gains?," Journal of Corporate Finance, Elsevier, vol. 43(C), pages 288-315.
    6. Ma, Qingzhong & Whidbee, David A. & Zhang, Wei, 2019. "Acquirer reference prices and acquisition performance," Journal of Financial Economics, Elsevier, vol. 132(1), pages 175-199.
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    8. Jeffry Netter & Mike Stegemoller & M. Babajide Wintoki, 2011. "Implications of Data Screens on Merger and Acquisition Analysis: A Large Sample Study of Mergers and Acquisitions from 1992 to 2009," The Review of Financial Studies, Society for Financial Studies, vol. 24(7), pages 2316-2357.
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    11. Walkling, Ralph A., 1985. "Predicting Tender Offer Success: A Logistic Analysis," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 20(4), pages 461-478, December.
    12. Eckbo, B. Espen, 2009. "Bidding strategies and takeover premiums: A review," Journal of Corporate Finance, Elsevier, vol. 15(1), pages 149-178, February.
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    Full references (including those not matched with items on IDEAS)

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