Security Voting Structure and Bidder Screening

Christian At, Mike Burkart and Samuel Lee
Additional contact information
Samuel Lee: Stern School of Business - NYU - New York University [New York] - NYU - NYU System

Post-Print from HAL

Abstract: This paper demonstrates that non-voting shares can promote take- overs. When the bidder has private information, shareholders may refuse to tender because they suspect to sell at an ex post unfa- vourable price. The ensuing friction in the sale of cash flow rights can prevent an efficient change of control. Separating cash flow and voting rights alters the degree of cross-subsidization among bidder types. It can therefore be used as an instrument to promote takeover activity and to discriminate between efficient and ineffi- cient bidders. The optimal fraction of non-voting shares decreases with managerial ability, implying an inverse relationship between firm value and non-voting shares.

Keywords: Tender offers; One share – one vote; Asymmetric information (search for similar items in EconPapers)
Date: 2011
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01308325v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Journal of Financial Intermediation, 2011, 20, pp.458-476. ⟨10.1016/j.jfi.2010.10.001⟩

Downloads: (external link)
https://shs.hal.science/halshs-01308325v1/document (application/pdf)

Related works:
Journal Article: Security-voting structure and bidder screening (2011)
Working Paper: Security-voting structure and bidder screening (2011)
Working Paper: Security-Voting Structure and Bidder Screening (2007)
Working Paper: Security-voting structure and bidder screening (2007)
Working Paper: Security-Voting Structure and Bidder Screening (2007)
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:hal:journl:halshs-01308325

DOI: 10.1016/j.jfi.2010.10.001

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().