Information Disclosure, Method of Payment, and Takeover Premiums: Public and Private Tender Offers in France

Abstract

In 1970, France introduced disclosure rules governing public tender offers without changing an existing four-week minimum offer period. We document a substantial increase in total offer premiums thereafter. Post-1970 premiums are also significantly higher in public than in private tender offers where information disclosure is not required. and in all-cash than in all-stock offers. The impact of the payment method is evident in minority buyouts as well as in offers for voting control. The component of the total premium reflecting the value of the option to tender appears to be unaffected by either disclosure regulations or the payment method.

Keywords: Tender offer, takeover premium, disclosure rules, method of payment, all-cash offer, all-stock offer, offer for control, minority buyout

JEL Classification: G32, G34, K22