Targeting Target Shareholders

Targeting target shareholders∗

We integrate heterogeneity and uncertainty in investor valuations into a model of takeovers. Investors have dispersed valuations, holding shares in firms they value more highly, and a successful offer must win approval from the median target shareholder. We derive the consequences for an acquiring firm’s takeover offer—its size and cash/equity structure—and implications for takeover premia and ...

Shareholders’ Pre-Emptive Rights

Large Shareholders and Corporate Control

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Shareholders vs Stakeholders Capitalism

Advising Shareholders In Takeovers

This paper studies the advisory role of a target company board in takeovers. I show that coordination failures among target shareholders, such as free-riding, limit the board’s ability to properly advise shareholders whether accepting a takeover o¤er is in their best interest based on its information. Even if there are no agency problems and the board’s objective is to maximize shareholders’val...