Takeover Bids Below the Expected Value of Minority Shares

Stock Price Manipulation Through Takeover Bids

Hedge Fund Activism vs. Hostile Takeover Bids⇤

We compare hedge fund activism and hostile tender offers in a unified framework where any investor who acquires an equity stake to improve firm value faces a dual free-rider problem: Neither do dispersed shareholders sell their shares unless the price fully reflects the anticipated value improvement nor do those who retain their shares participate in the costs. We show that activism and tender ...

Share Tendering Strategies and the Success of Hostile Takeover Bids

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Sold below Value? Why Some Targets Accept Very Low and Even Negative Takeover Premiums

Although many studies acknowledge negative premiums, there exists no theoretical or dedicated empirical analysis of the phenomenon. In our sample of 1,937 US mergers (1995 to 2011), 8.4 percent of all targets received o ers with negative premiums where the initial bid undercuts the pre-announcement market price. We theoretically show that target overvaluation, market liquidity and `hidden earno...

MINORITY vs. MAJORITY: AN EXPERIMENTAL STUDY OF STANDARDIZED BIDS

Due to its simplicity the plurality voting system is frequently used to choose a common representative or project. Nevertheless it may fail to provide a socially efficient decision as a majority can outvote any minority even if the majority’s gain does not compensate the loss suffered by the minority. In this paper we propose and study a simple mechanism that allows voters to reveal more inform...