The Pressure to Tender: An Analysis and a Proposed Remedy

Abstract

This paper provides a compact account of the problem of distorted choice in corporate takeovers. (A more detailed account is provided in, "Towards Undistorted Choice and Equal Treatment in Corporate Takeovers"). I analyze how the tender decisions of shareholders facing a takeover bid might be distorted. I also put forward an approach for addressing this problem, as well as analyze several alternative remedies.

Keywords: Takeovers, targets, pressure, tender offers, for tender anti-takeover arrangements, anti-takeover statues, minority shares, freeze outs, bid price, voting

JEL Classification: G30, G34, K22