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Freeze-out mergers: the case of shareholders with multiple shares

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  • Kyounghun Lee
  • Frederick Dongchuhl Oh

Abstract

This paper investigates the role of freeze-out mergers in mitigating the free-rider problem in tender offers. In contrast to a framework in which each shareholder owns exactly one share, our model allows shareholders to have multiple shares. We find that a more aggressive freeze-out clause forces shareholders to tender more shares. Therefore, raiders capture a greater amount of surplus when the requirement for freeze-out mergers becomes easier to satisfy.

Suggested Citation

  • Kyounghun Lee & Frederick Dongchuhl Oh, 2024. "Freeze-out mergers: the case of shareholders with multiple shares," Applied Economics Letters, Taylor & Francis Journals, vol. 31(1), pages 65-70, January.
    • Handle: RePEc:taf:apeclt:v:31:y:2024:i:1:p:65-70
    DOI: 10.1080/13504851.2022.2125492
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    Cited by:

    1. Armando Gomes, 2024. "Takeovers, Freezeouts, and Risk Arbitrage," Games, MDPI, vol. 15(1), pages 1-27, January.

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