Targeting Target Shareholders

• 成果类型: Article
• 署名作者: Bernhardt, Dan; Liu, Tingjun; Marquez, Robert
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; University of Hong Kong; Renmin University of China; University of California System; University of California Davis
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2016.2598
• 发表日期: 2018
• 页码: 1489-1509
• 关键词: Heterogeneous valuations; Mergers and Acquisitions; optimal takeover offers

摘要

We integrate heterogeneity and uncertainty in investor valuations into a model of takeovers. Investors have dispersed valuations, holding shares in firms they value more highly, and a successful offer must win approval from the median target shareholder. We derive the consequences for an acquiring firm's takeover offer-its size and cash/equity structure-and implications for takeover premia, firm returns, share price dynamics, the probability that a takeover succeeds, and shareholder welfare. We characterize when the acquirer prefers cash offers and when equity offers are best. Our model collectively reconciles various empirical regularities that have proven elusive to explain in one unified framework, and we derive new testable predictions.