Strategic Issues in Cash Tender Offers Predicting Bid Premiums, Probability Of Success, and Target Management's Response
10 Pages Posted: 23 Sep 2008 Last revised: 30 Jul 2011
Date Written: July 28, 2011
In spite of the increased level of merger and takeover activity, and the intense interest of researchers in the subject, many important questions about tender offers remain unanswered. For example, what determines the size of bid premiums? Can we predict whether or not a tender offer will be successful? What, if anything, differentiates offers which are resisted by target management from those which are accepted? The purpose of this article is to summarize recent work (by one or both of the authors) that attempts to answer these questions by looking at a sample of 158 cash tender offers over the period 1972-1977.
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