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Breaking up is hard to do? An analysis of termination fee provisions and merger outcomes

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  • Bates, Thomas W.
  • Lemmon, Michael L.

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  • Bates, Thomas W. & Lemmon, Michael L., 2003. "Breaking up is hard to do? An analysis of termination fee provisions and merger outcomes," Journal of Financial Economics, Elsevier, vol. 69(3), pages 469-504, September.
    • Handle: RePEc:eee:jfinec:v:69:y:2003:i:3:p:469-504
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    1. Singh, Rajdeep, 1998. "Takeover Bidding with Toeholds: The Case of the Owner's Curse," The Review of Financial Studies, Society for Financial Studies, vol. 11(4), pages 679-704.
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    5. Hirshleifer, David, 1989. "Facilitation of Competing Bids and the Price of a Takeover Target," University of California at Los Angeles, Anderson Graduate School of Management qt2496649g, Anderson Graduate School of Management, UCLA.
    6. McLaughlin, Robyn M., 1990. "Investment-banking contracts in tender offers : An empirical analysis," Journal of Financial Economics, Elsevier, vol. 28(1-2), pages 209-232.
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    9. Comment, Robert & Schwert, G. William, 1995. "Poison or placebo? Evidence on the deterrence and wealth effects of modern antitakeover measures," Journal of Financial Economics, Elsevier, vol. 39(1), pages 3-43, September.
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    11. Jennings, Robert H & Mazzeo, Michael A, 1993. "Competing Bids, Target Management Resistance, and the Structure of Takeover Bids," The Review of Financial Studies, Society for Financial Studies, vol. 6(4), pages 883-909.
    12. Andrei Shleifer & Robert W. Vishny, 1986. "Greenmail, White Knights, and Shareholders' Interest," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 293-309, Autumn.
    13. Betton, Sandra & Eckbo, B Espen, 2000. "Toeholds, Bid Jumps, and Expected Payoffs in Takeovers," The Review of Financial Studies, Society for Financial Studies, vol. 13(4), pages 841-882.
    14. Fama, Eugene F. & French, Kenneth R., 1997. "Industry costs of equity," Journal of Financial Economics, Elsevier, vol. 43(2), pages 153-193, February.
    15. Giammarino, Ronald M & Heinkel, Robert L, 1986. "A Model of Dynamic Takeover Behavior," Journal of Finance, American Finance Association, vol. 41(2), pages 465-480, June.
    16. Randall Morck & Andrei Shleifer & Robert W. Vishny, 1988. "Characteristics of Targets of Hostile and Friendly Takeovers," NBER Chapters, in: Corporate Takeovers: Causes and Consequences, pages 101-136, National Bureau of Economic Research, Inc.
    17. Martin, Kenneth J & McConnell, John J, 1991. "Corporate Performance, Corporate Takeovers, and Management Turnover," Journal of Finance, American Finance Association, vol. 46(2), pages 671-687, June.
    18. Berkovitch, Elazar & Bradley, Michael & Khanna, Naveen, 1989. "Tender Offer Auctions, Resistance Strategies, and Social Welfare," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 5(2), pages 395-412, Fall.
    19. Comment, Robert & Jarrell, Gregg A., 1987. "Two-tier and negotiated tender offers: The imprisonment of the free-riding shareholder," Journal of Financial Economics, Elsevier, vol. 19(2), pages 283-310, December.
    20. Banerjee, Ajeyo & Owers, James E., 1996. "The impact of the nature and sequence of multiple bids in corporate control contests," Journal of Corporate Finance, Elsevier, vol. 3(1), pages 23-43, December.
    21. Burch, Timothy R., 2001. "Locking out rival bidders: The use of lockup options in corporate mergers," Journal of Financial Economics, Elsevier, vol. 60(1), pages 103-141, April.
    22. Pound, John, 1987. "The Effects of Antitakeover Amendments on Takeover Activity: Some Direct Evidence," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 353-367, October.
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    Cited by:

    1. Bebchuk, Lucian & Cohen, Alma & Wang, Charles C.Y., 2014. "Golden Parachutes and the Wealth of Shareholders," Journal of Corporate Finance, Elsevier, vol. 25(C), pages 140-154.
    2. Eckbo, B Espen & Thorburn, Karin S & ,, 2005. "The Toehold Puzzle," CEPR Discussion Papers 5084, C.E.P.R. Discussion Papers.
    3. Grosskopf Ofer & Medina Barak, 2007. "Rationalizing Drennan: On Irrevocable Offers, Bid Shopping and Binding Range," Review of Law & Economics, De Gruyter, vol. 3(2), pages 321-361, August.
    4. Schneck, Colin & Bessler, Wolfgang & Zimmermann, Jan, 2014. "Bidder Contests in International Mergers and Acquisitions: The Impact of Toeholds, Preemptive Bidding, and Termination Fees," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100493, Verein für Socialpolitik / German Economic Association.
    5. Anup Agrawal & Tommy Cooper & Qin Lian & Qiming Wang, 2013. "Common Advisers in Mergers and Acquisitions: Determinants and Consequences," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 691-740.
    6. Harry Huizinga & Johannes Voget & Wolf Wagner, 2008. "International Taxation and Takeover Premiums in Cross-border M&As," Working Papers 0809, Oxford University Centre for Business Taxation.
    7. S. Rosenkranz & U. Weitzel, 2005. "Bargaining in Mergers: The Role of Outside Options and Termination Provisions," Working Papers 05-32, Utrecht School of Economics.
    8. Utz Weitzel & Sjors Berns, 2006. "Cross-border takeovers, corruption, and related aspects of governance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(6), pages 786-806, November.
    9. Russell Pittman, 2017. "The Strange Career Of Independent Voting Trusts In U.S. Rail Mergers," Journal of Competition Law and Economics, Oxford University Press, vol. 13(1), pages 89-102.
    10. Bernhardt, Dan & Liu, Tingjun & Sogo, Takeharu, 2020. "Costly auction entry, royalty payments, and the optimality of asymmetric designs," Journal of Economic Theory, Elsevier, vol. 188(C).
    11. Bates, Thomas W. & Becher, David A. & Lemmon, Michael L., 2008. "Board classification and managerial entrenchment: Evidence from the market for corporate control," Journal of Financial Economics, Elsevier, vol. 87(3), pages 656-677, March.
    12. U. Weitzel & S. Rosenkranz, 2007. "Bargaining in Mergers and Termination Fees," Working Papers 07-06, Utrecht School of Economics.
    13. Uysal, Vahap B. & Kedia, Simi & Panchapagesan, Venkatesh, 2008. "Geography and acquirer returns," Journal of Financial Intermediation, Elsevier, vol. 17(2), pages 256-275, April.
    14. Dulani Jayasuriya & Ben O’Neill, 2021. "Social Media’s Impact on the Global Mergers and Acquisitions Market," JRFM, MDPI, vol. 14(4), pages 1-41, April.
    15. Makhija, Anil K. & Narayanan, Rajesh P., 2007. "Fairness Opinions in Mergers and Acquisitions," Working Paper Series 2007-11, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    16. Chen, Yangyang & Podolski, Edward J. & Rhee, S. Ghon & Veeraraghavan, Madhu, 2017. "Do progressive social norms affect economic outcomes? Evidence from corporate takeovers," Journal of Empirical Finance, Elsevier, vol. 41(C), pages 76-95.
    17. Bargeron, Leonce L., 2012. "Do Shareholder Tender Agreements inform or expropriate shareholders?," Journal of Corporate Finance, Elsevier, vol. 18(2), pages 373-388.
    18. Goldman, Eitan & Qian, Jun, 2005. "Optimal toeholds in takeover contests," Journal of Financial Economics, Elsevier, vol. 77(2), pages 321-346, August.
    19. C. N. V. Krishnan & Ronald W. Masulis, 2013. "Law Firm Expertise and Merger and Acquisition Outcomes," Journal of Law and Economics, University of Chicago Press, vol. 56(1), pages 189-226.
    20. Bates, Thomas W. & Lemmon, Michael L. & Linck, James S., 2006. "Shareholder wealth effects and bid negotiation in freeze-out deals: Are minority shareholders left out in the cold?," Journal of Financial Economics, Elsevier, vol. 81(3), pages 681-708, September.
    21. Jeon, Jin Q. & Ligon, James A., 2011. "How much is reasonable? The size of termination fees in mergers and acquisitions," Journal of Corporate Finance, Elsevier, vol. 17(4), pages 959-981, September.

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