| Paper Number | KCB-WP-2014-020 |
|---|---|
| Title | Unique Equilibrium in a Model of Takeovers Involving Block Trades and Tender Offers |
| Title(Other) | |
| Author | Frederick Dongchuhl Oh ; Sangkyu Baek |
| Publisher | |
| Abstract | Small shareholders face coordination problems during takeovers. Without common knowledge of a bidder&146 | s negotiation ability with an incumbent blockholder in support of a takeover, the probability of takeover success is uniquely determined if the private information available to small shareholders regarding the bidder&146 | s negotiation ability is precise enough. An analysis of the unique equilibrium demonstrates that the earmarked freeze-out amount and the expected amount of abnormal returns a¤ect the takeover&146 | s outcome. Moreover, the e¤ect of the blockholder&146 | s size on the takeover&146 | s outcome is determined by the relative size of the earmarked freeze-out amount and the expected amount of abnormal returns. (JEL G34, D82) |
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