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An Analysis of Shareholder Agreements

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  • Ljungqvist, Alexander
  • Chemla, Gilles
  • Habib, Michel

Abstract

Shareholder agreements govern the relations among shareholders in privately-held companies, such as joint ventures or venture capital-backed ?rms. We provide an explanation for the use of put and call options, pre-emption rights, drag-along rights, demand rights, tag-along rights, and catch-up clauses in shareholder agreements. We view these clauses as serving to preserve the parties? incentives to make ex ante investments when ex post renegotiation may alter the parties? shares of the payoff. We extend our framework to discuss the use of other clauses, such as the option to extend the life of a business alliance.

Suggested Citation

  • Ljungqvist, Alexander & Chemla, Gilles & Habib, Michel, 2002. "An Analysis of Shareholder Agreements," CEPR Discussion Papers 3457, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3457
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    More about this item

    Keywords

    Shareholder agreements; Put options; Call options; Pre-emption rights; Drag-along rights; Demand rights; Tag-along rights; Catch-up clauses;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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