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

43 Pages Posted: 1 Oct 2009  

B. Espen Eckbo

Tuck School of Business at Dartmouth; European Corporate Governance Institute (ECGI)

Herwig Langohr

INSEAD, Finance (Deceased)

Date Written: August 1989

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

Suggested Citation

Eckbo, B. Espen and Langohr, Herwig, Information Disclosure, Method of Payment, and Takeover Premiums: Public and Private Tender Offers in France (August 1989). Journal of Financial Economics (JFE), Vol. 24, pp. 363-403, 1989. Available at SSRN: https://ssrn.com/abstract=1480846

B. Espen Eckbo (Contact Author)

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States
603-646-3953 (Phone)
603-646-3805 (Fax)

HOME PAGE: http://www.tuck.dartmouth.edu/eckbo

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Herwig Langohr

INSEAD, Finance (Deceased) ( email )

France

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