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Among the remaining states, California is a distant second in market share, with five merger

freeze-outs and two tender offer freeze-outs. Florida is in third place with four merger freeze-

outs and no tender offer freeze-outs. The remaining 39 freeze-outs are distributed across 24 U.S.

states and a federal charter, with no state holding more than a 3% share.

Table 2A provides summary statistics, for all freeze-outs and broken down by transactional

form. Table 2B provides the same summary statistics for Delaware targets only.

[insert Tables 2A & 2B here]

Examining shareholder characteristics, controllers who use the tender offer mechanism hold

larger pre-deal stakes than controllers who use the merger mechanism, providing some support

for Hypothesis H3. I test this hypothesis more carefully in the multivariate regressions reported

in

Part

4.3.

Family

groups

are

somewhat

more

likely

to

use

the

merger

mechanism,

or,

conversely, controllers that are also corporations are more likely to use the tender offer

mechanism. Specifically, Table 2A shows that founders or family groups account for nearly half

of merger freeze-outs but only one-third of tender offer freeze-outs.

“Highly experienced” outside counsel are over-represented in the tender offer mechanism,

accounting for 49% of tender offers and only 22% of mergers. The difference becomes more

pronounced when Delaware targets only are examined: 63% of tender offers involve experienced

outside counsel, compared to 21% of mergers. These findings are consistent with Hypothesis

H4. I test this hypothesis more carefully in Part 4.5.

On deal characteristics, 21% of freeze-outs overall, and 26% of tender offer freeze-outs,

involve stock rather than cash. This finding is inconsistent with Gilson & Gordon’s claim that

21

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