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in Part 4.1, two freeze-outs (Kontron Mobile and Ticketmaster) cannot be readily classified as

either merger freeze-outs or tender offer freeze-outs and therefore are omitted from the analysis

in this Part. The results reported in this Part do not change if these transactions are classified

according to the controller’s initial expression of interest to the target (merger for Kontron

Mobile, tender offer for Ticketmaster).

MINREQ is a scalar variable that measures the percent of minority shares that the controller

needed in order to close the transaction. For tender offer freeze-outs, MINREQ is a monotonic

transformation of the controller’s pre-deal stake (CONTROL), as described in Part 3.2, and

ranges from 45% (for a controller with a large pre-deal stake and no MOM condition in the deal)

to 83% (for a controller with a small pre-deal stake). For merger freeze-outs, MINREQ ranges

from 0 for merger freeze-outs without a MOM condition in which the controller holds more than

50% of the voting shares, to 50 for mergers with a MOM condition. Hypothesis H2 predicts that

the MINREQ coefficient will be statistically significant and positive.

I control for other deal characteristics, such as the size of the deal (LNVAL, defined as the

natural log of deal value) and whether the consideration is stock or cash (STOCK, set to 1 for

stock deals). I also control for two aspects of the target shareholder profile. First, I control for

the size of the controller’s pre-deal stake, between 35 and 90. Larger controlling shareholders

may have more influence over the bargaining process independent of its implications for the

minority shareholder approval required. Indeed, in merger freeze-outs with MOM conditions,

the requisite minority approval is entirely uncorrelated with the controller’s pre-deal stake.

Second, I control for the concentration of the minority stake using two proxies: the percent held

by institutional investors, and the number of large-block institutional holders, defined as

institutional holders with a 3% or larger stake. Institutions may have greater bargaining power


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