We develop a model of freeze-out merger and tender offers and test it in an economy where merger and tender regulation are extremely different. Using a relatively large sample of 329 freeze-out offers in Israel during 2000–2019, we document evidence consistent with the model. We also find that tender offers: (1) are the preferred technique; (2) offer lower premiums; and (3) suffer from a relatively large (40%) offer rejection rate. These findings diverge from U.S. evidence, and are partly due to differences in the tender offer procedures. Thus, our study illustrates that the tender offer procedure is a delicate one, and explains why Delaware has often amended it.
Bibliographical noteFunding Information:
∗We have benefited from the comments of Sharon Hannes, Kobi Kastiel, the journal editors and reviewers, and participants of the JLFA 2020 Conference in Milan and the 2021 EALE conference. All remaining errors are our own. Financial support by the Raymond Ackerman Family Chair in Israeli Corporate Governance is gratefully acknowledged.
© 2021 B. Lauterbach, E. Lyandres, Y. Mugerman and B. Yarkoni
- Controlling shareholders
- Going private transactions
- Tender offers