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the influence of deal size in two more focused ways. First, Model #2 of Tables 4A and 4B runs

the stripped-down model only on deals larger than $10 million in deal value, on the grounds that

smaller deals are more likely to involve illiquid stock or other pressures to sell to the controller

that are unrelated to transactional form.41

Second, Model #3 of Tables 4A and 4B run the

stripped-down model as a weighted regression, in which the weight for each observation is

log(deal size).

The results from both Model #2 and Model #3 are generally consistent with the overall

results presented in Tables 3 and 4. Most importantly, the TENDER coefficient continues to be

statistically

significant

and

negative

in

all

but

one

specification.

LNVAL

continues

to

be

negative and statistically significant in some specifications, and highly significant in the

weighted

regression.

For

the

first

time

MINREQ

becomes

statistically

significant

in

the

predicted direction in Model #2 of Table 4A, though this result is not robust to other

specifications. No other control variables are statistically significant in any of the specifications

reported in Models #2 and #3, in either Table 4A or 4B.

Finally, Model #4 in Tables 4A and 4B runs the model on cash deals only. Freeze-outs for

cash are thought to be particularly problematic transactions in corporate law because the

minority shareholders retain no ongoing interest in the

enterprise.

Table

2

shows

that

71%

of

the deals in the sample are cash freeze-outs. The results from Model #4 show that the TENDER

coefficient continues to be statistically significant and negative when cash deals only are

examined, for all targets and for Delaware targets only.

41 At a conference at the University of Pennsylvania where this paper was presented, a transactional lawyer referred to these very small freeze-outs as “mercy killings.”

28

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