Takeover Bidding and Shareholder Information

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Oxford Journals Contact Us My Basket My Account Review of Corporate Finance Studies About This Journal Contact This Journal Subscriptions View Current Issue (Volume 2 Issue 1 March 2013) Archive Search Oxford Journals EconomicsSocial Sciences Review of Corporate Finance Studies Volume 1 Issue 1 Pp. 1-27. Takeover Bidding and Shareholder Information Robert Marquez

University of California at Davis Bilge Yilmaz

University of Pennsylvania Send correspondence to Bilge Yilmaz, Finance Department, University of Pennsylvania, 2300 Steinberg Hall/Dietrich Hall, 3620 Locust Walk, Philadelphia, PA 19104; telephone: (215) 898-1163. E-mail: yilmaz{at}wharton.upenn.edu. Abstract We study the role of shareholder information during the acquisition of widely held firms. When target shareholders share the same information about the post-takeover value, increasing the precision of information has no effect on the expected acquisition price. However, more precise information aggravates the free-rider problem, allowing shareholders to better discern when it is worthwhile to hold out rather than tender their shares. By contrast, when information is dispersed among shareholders, providing shareholders with superior information induces the raider to offer higher prices, thus increasing shareholder value. However, in this case, neither prices nor tendering decisions aggregate any information. (JEL G34, D82)

© The Author 2012. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com. Next Article » Table of Contents This Article Review of Corporate Finance Studies (2012) 1 (1): 1-27. doi: 10.1093/rcfs/cfs004 First published online: July 25, 2012 » Abstract Full Text (HTML) Full Text (PDF) All Versions of this Article: cfs004v1 1/1/1 most recent Classifications Articles Services Alert me when cited Alert me if corrected Find similar articles Similar articles in Web of Science Add to my archive Download citation Request Permissions Citing Articles Load citing article information Citing articles via CrossRef Citing articles via Scopus Citing articles via Web of Science Citing articles via Google Scholar Google Scholar Articles by Marquez, R. Articles by Yilmaz, B. Search for related content Related Content Load related web page information Share Email this article CiteULike Delicious Facebook Google+ Mendeley Twitter What's this?

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