Shareholder Decision Rights in Acquisitions: Evidence from Tender Offers
51 Pages Posted: 11 Jul 2015 Last revised: 9 Jan 2018
Date Written: December 19, 2017
We exploit a 2013 Delaware law that reduces the shareholder support threshold for two-step tender offers to investigate the impact of differing levels of shareholder support on deal structures and outcomes. After the legal change, Delaware acquisitions, as opposed to other states, are more likely to be completed via tender offer, and Delaware targets collectively receive greater acquisition premiums and returns relative to firms incorporated in other states. Our results caution that supermajority shareholder approval thresholds can increase the risk of shareholder holdup and have little (if any) effect on managerial self-dealing.
Keywords: Merger, Tender Offer, Acquisitions, M&A, Supermajority, Shareholder Voting, Shareholder Approval, Delaware Law
JEL Classification: G14, G34, G38, K22
Suggested Citation: Suggested Citation