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We might expect to see convergence in outcomes between tender offer freeze-outs and

merger freeze-outs as lawyers and law firms become more comfortable with the tender offer

mechanism, and a tender offer therefore becomes a better understood implicit threat in the

freeze-out merger negotiations.42 To test this theory, I include in the Table 3 & 4 models a new

interaction variable TENDER*LTREND, in which LTREND is calculated as the natural log of

the number of days between the Siliconix decision and the deal announcement date. If merger

freeze-outs are increasingly negotiated in the shadow of a tender offer freeze-out, as controlling

shareholders and/or their legal counsel become more aware of the benefits of the tender offer

route, the coefficient for the new TENDER*LTREND variable should be statistically significant

and positive. However, in unreported regressions, I find that this new interaction variable, as

well as standard transformations, is not stable in magnitude or sign, and is not statistically


4.4. Analysis of transactional form

I now turn to the determinants of transactional form between mergers and tender offers. The

theory developed in Part 3 predicts that the likelihood of using a tender offer should be

increasing in the controller’s stake (H3), and that outside counsel with significant M&A

experience should be more likely to use a tender offer (H4).43

42 43 I thank Jeff Gordon for this hypothesis. Two other potential determinants of transactional form can be dismissed at the outset. First, DEL. GEN. CORP. L. §203 and equivalent freeze-out statutes in other states might, in theory, require the controller to go through the merger route. However, I find no evidence that these statutes influenced transactional form in the deals in my database, likely because freeze-out statutes were intended to thwart arms-length acquirers and are easily avoided by controlling shareholders. For example, all but eleven of the controlling shareholders in my sample (89%) held their shares for the requisite holding period (three years in Delaware) and are thus exempt from the requirements imposed by freeze-out statutes. Among the eleven controllers that held their shares for less than the necessary holding period, all eleven acquired control with the consent of the target board (indeed, in the post-pill era, acquisition of control without consent would have been surprising), and thus fall within the exception provided by DEL. GEN. CORP. L. §203(a)(1) and analogous provisions in other states. In the post-pill era, freeze-out statutes have their bite primarily in arms-length sale of control situations. See, e.g., In re Digex, Inc. Shareholder Litigation, 789 A.2d 1176 (arms-length buyer in sale of control seeking §203 waiver). To the extent that these sale of control transactions lead


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