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Pre-Tender Offer Share Acquisition Strategy in Takeovers

Published online by Cambridge University Press:  06 April 2009

Bhagwan Chowdhry  and
Narasimhan Jegadeesh
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Abstract

This paper models the strategic pre-tender offer share acquisition problem faced by potential bidders in takeovers. The model provides a rational explanation for the seemingly anomalous empirical evidence that the information about the impending tender offers is not fully conveyed through the potential bidders' pre-tender offer trades and for the evidence that a large fraction of bidders do not hold any target shares prior to launching the tender offers. Additional testable implications are also provided.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 29 , Issue 1 , March 1994 , pp. 117 - 129
Copyright
Copyright © School of Business Administration, University of Washington 1994

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