Takeovers and the Dynamics of Information Flows
نویسنده
چکیده
This paper analyzes the e ect of a possible takeover on information ows and on the terms of trade in business relationships. We consider a longterm relationship between a rm and a privately informed stakeholder, say a buyer. In our model, takeovers both increase the surplus from trade and enable the rm to extract a potentially higher share of the surplus from the buyer. The possibility of a takeover that leaves the buyer with a higher (resp. lower) rent than the incumbent manager increases (resp. decreases) the buyer's willingness to reveal his valuation. We suggest a number of testable predictions on the performance of takeover targets and trade credit. (JEL D82, G34, L14) Keyworda: Takeovers, information, disclosure, buyer, price, value.
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