Barbarians in Chains - Takeover Regulation and Minority Shareholder Wealth

Ulrike Hoffmann-Burchardi

FMG Discussion Papers from Financial Markets Group

Abstract: This article proposes a model that formalises the trade-off minority shareholders of corporate raiders face with respect to the adoption of a mandatory tender offer after a shift in control. Under reasonable distributional assumptions about control and security benefits the model suggest that minority shareholders profit from the adoption of the mandatory bid rule. A subsequent empirical study supports this Takeover Code, which introduced the mandatory bid rule in 1995. A fully efficient maximum likelihood estimator is derived for a trivariate regression model that estimates characteristics of corporate acquirers, takes account of the endogeneity of the acceptance decision, and explains the abnormal event-period returns.

Date: 1999-07
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.lse.ac.uk/fmg/workingPapers/discussionPapers/fmg_pdfs/dp330.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fmg:fmgdps:dp330

Access Statistics for this paper

More papers in FMG Discussion Papers from Financial Markets Group
Bibliographic data for series maintained by The FMG Administration ().