I define the final offer as the final agreed price at which the transaction closes. Because a
final offer requires a completed transaction, I exclude failed transactions from this analysis. For
stock deals, I convert the exchange ratio to a cash value using the pre-announcement stock ratios
of the target and acquiror, because subsequent movements in the target and acquiror stock prices
will be influenced by the deal announcement itself. For eight freeze-outs, I am unable to find
meaningful pre-deal market prices for the target stock, either because the stock is extremely
thinly traded,32 or because the target stock price is not reported in SEC filings on dates
surrounding the transaction. These transactions are excluded from the analysis of deal outcomes
reported in this Part. I also exclude SAZTEC International as an outlier observation. This very
small merger freeze-out involved unreasonably large premiums of 400-600% depending on the
baseline date used. If SAZTEC were included in the outcomes analysis, the results reported in
this Part regarding the TENDER coefficient would become statistically stronger.
The controller’s outside counsel in each transaction is identified using the contact
information from the target’s 14D-9 filing in a tender offer or the target’s 14A filing in a merger,
or from the acquirer’s 13D filing. Because 14D-9 and 14A filings are not required in many
unsuccessful deals, I am unable to identify the controller’s outside counsel in eight freeze-outs.
Following Coates (2001), I use the number of prior M&A transactions as a proxy for the M&A
Corporation M&A database to tabulate the number of deals in which each law firm was either an
advisor to the acquirer or the target, for all arms-length mergers and acquisitions of U.S. public
32 See, e.g., Pak Mail Schedule 14A (filed Nov. 6, 2002) (“Pak Mail's latest closing share price prior to the delivery of Duff & Phelps opinion was $0.06 per share on September 19, 2002 [one month before the announcement of the transaction]. However, trading activity in Pak Mail's stock is extremely thin. From January 1, 2002 to October 14, 2002, Pak Mail's stock traded on only 18 days with a total of 10,000 shares changing hands. Based on its analysis of share prices and trading activity, Duff & Phelps does not believe that the latest available closing price provides an accurate indication of the value of Pak Mail's common stock.”).