The Choice Between Various Freeze-out Procedures and its Consequences

Beni Lauterbach, Evgeny Lyandres, Yevgeny Mugerman and Barak Yarkoni

Journal of Law, Finance, and Accounting, 2021, vol. 6, issue 2, 315-351

Abstract: We develop a model of freeze-out merger and tender offers and test it in an economy where merger and tender regulation are extremely different. Using a relatively large sample of 329 freeze-out offers in Israel during 2000–2019, we document evidence consistent with the model. We also find that tender offers: (1) are the preferred technique; (2) offer lower premiums; and (3) suffer from a relatively large (40%) offer rejection rate. These findings diverge from U.S. evidence, and are partly due to differences in the tender offer procedures. Thus, our study illustrates that the tender offer procedure is a delicate one, and explains why Delaware has often amended it.

Keywords: Going private transactions; controlling shareholders; mergers; tender offers (search for similar items in EconPapers)
JEL-codes: G32 G34 G38 K22 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:now:jnllfa:108.00000055

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