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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/26724
Title: THE FOUNDATIONS OF FREEZEOUT LAWS IN TAKEOVERS
Authors: Amihud, Yakov
Kahan, Marcel
Sundaram, Rangarajan
Issue Date: 20-Aug-2003
Series/Report no.: S-CG-02-04
Abstract: We provide an economic basis for permitting freezeouts of non-tendering shareholders following successful takeovers. We describe a specific freezeout mechanism based on easily verifiable information that induces desirable efficiency and welfare properties in models of both corporations with widely dispersed shareholdings and corporations with large pivotal shareholders. The mechanism dominates previous proposals along some important dimensions. We also examine takeover premia that arise in the presence of competition among raiders. Our mechanism is closely related to the practice of takeover law in the U.S.; thus, our analysis may be thought of as analyzing the economic foundations of current regulations.
URI: http://hdl.handle.net/2451/26724
Appears in Collections:Corporate Governance

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