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Two‐Stage Acquisitions, Free‐Riding, and Corporate Control
Author(s) -
Sullivan Michael J.,
Peterson Pamela P.,
Peterson David R.
Publication year - 1990
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1990.tb00804.x
Subject(s) - shareholder , stage (stratigraphy) , business , control (management) , relation (database) , tender offer , monetary economics , finance , economics , corporate governance , management , computer science , paleontology , database , biology
This study examines two‐stage acquisitions, focusing upon first‐ and second‐stage excess returns for both acquired and acquiring firms, and analyzing the relation between acquisition returns and ownership interest. The evidence suggests that target firm shareholders do not free‐ride. Evidence is also provided indicating that premiums are paid by the majority holder to acquire a remaining minority interest.