If at first you don't succeed: The effect of the option to resolicit on corporate takeovers

• 成果类型: Article
• 署名作者: Gillette, AB; Noe, TH
• 署名单位: University System of Georgia; Kennesaw State University; Federal Reserve System - USA; Federal Reserve Bank - Atlanta; Tulane University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhj011
• 发表日期: 2006
• 页码: 561
• 关键词: FREE-RIDER PROBLEM

摘要

This article models, and experimentally simulates, the free-rider problem in a takeover when the raider has the option to resolicit, that is, to make a new offer after an offer has been rejected. In theory, the option to resolicit, by lowering offer credibility, increases the dissipative losses associated with free riding. The outcomes of our experiment support this prediction and produce losses from free riding even higher than theoretically predicted. These dissipation losses reduce raider gains to less than 3% of synergy value of the acquisition.