Takeover bids, unconditional offer price and investors protection
de La Bruslerie, Hubert; Deffains-Crapsky, Catherine (2005), Takeover bids, unconditional offer price and investors protection, Review of Financial Economics, 14, 2, p. 103-126. 10.1016/j.rfe.2004.07.001
Type
Article accepté pour publication ou publiéDate
2005Journal name
Review of Financial EconomicsVolume
14Number
2Publisher
Elsevier
Pages
103-126
Publication identifier
Metadata
Show full item recordAuthor(s)
de La Bruslerie, HubertDauphine Recherches en Management [DRM]
Deffains-Crapsky, Catherine
Groupe de Recherche Angevin en Economie et Management [GRANEM]
Abstract (EN)
In this paper, we develop a contingent claim analysis on shareholders' right to sell unconditionally their shares at the acquisition bid price during a takeover bid procedure. Compared with a situation without any guarantee, this regulation brings about wealth transfer towards outside shareholders. Why, in an apparently irrational way, do outside shareholders, who may benefit from a price guarantee, not systematically sell their shares? That question emphasizes the outside shareholders' behavior. Using a real option valuation model to evaluate the price guarantee opportunity, we show that an equal treatment rule between controlling and outside shareholders may lead outside shareholders to sell their shares.Subjects / Keywords
shareholders; finance; wealth transferRelated items
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