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Motivations For Hostile Tender Offers And The Market For Political Exchange

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  • ANNETTE B. POULSEN
  • GREGG A. JARRELL

Abstract

This paper reviews the arguments concerning the role of hostile tender offers in today's corporate world. Some observers suggest that “corporate raiders” do not pay shareholders a fair price for their holdings and that they disrupt firms' day‐to‐day operations. Others point to the significant premiums paid to shareholders in tender offers, and they suggest that raiders play an important role in forcing changes in corporations. The paper also presents the authors' views on the viability of proposed regulations in the corporate control area.

Suggested Citation

  • Annette B. Poulsen & Gregg A. Jarrell, 1986. "Motivations For Hostile Tender Offers And The Market For Political Exchange," Contemporary Economic Policy, Western Economic Association International, vol. 4(3), pages 30-45, July.
    • Handle: RePEc:bla:coecpo:v:4:y:1986:i:3:p:30-45
    DOI: 10.1111/j.1465-7287.1986.tb00847.x
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    References listed on IDEAS

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    1. Jensen, Michael C. & Ruback, Richard S., 1983. "The market for corporate control : The scientific evidence," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 5-50, April.
    2. Dodd, Peter & Warner, Jerold B., 1983. "On corporate governance : A study of proxy contests," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 401-438, April.
    3. Jarrell, Gregg A, 1985. "The Wealth Effects of Litigation by Targets: Do Interests Diverge in a Merge?," Journal of Law and Economics, University of Chicago Press, vol. 28(1), pages 151-177, April.
    4. Bradley, Michael & Desai, Anand & Kim, E. Han, 1983. "The rationale behind interfirm tender offers : Information or synergy?," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 183-206, April.
    5. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    6. Stigler, George J, 1982. "The Economists and the Problem of Monopoly," American Economic Review, American Economic Association, vol. 72(2), pages 1-11, May.
    7. Jarrell, Gregg A & Bradley, Michael, 1980. "The Economic Effects of Federal and State Regulations of Cash Tender Offers," Journal of Law and Economics, University of Chicago Press, vol. 23(2), pages 371-407, October.
    8. Bradley, Michael, 1980. "Interfirm Tender Offers and the Market for Corporate Control," The Journal of Business, University of Chicago Press, vol. 53(4), pages 345-376, October.
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    Cited by:

    1. Bronwyn H. Hall, 1988. "The Effect of Takeover Activity on Corporate Research and Development," NBER Chapters, in: Corporate Takeovers: Causes and Consequences, pages 69-100, National Bureau of Economic Research, Inc.

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