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In closing this Part, I note that the results on law firm experience are generally less robust

than the other findings presented in this paper. In unreported regressions, I classify firms as

“highly experienced” if they are among the top ten in M&A experience, or the top twenty, rather

than the top fifteen. In these alternative specifications, the EXPERIENCE coefficients are

positive, consistent with Hypothesis H4, but generally not statistically significant at any

conventional level. One possible interpretation of these (non)findings is that law firm network

and learning effects operate among a particular set of New York City and Wilmington, Delaware

law firms, rather than being more continuous.

4.5. Causation

Causation is a concern with respect to both deal outcomes and deal form. On outcomes, it is

possible that the difference between merger freeze-outs and tender offer freeze-outs is due to

some unobservable underlying factor that influences both transactional form and deal outcomes.

For example, “aggressive” controllers may be more likely to choose a tender offer, and may also

be more likely to bargain hard against the SC. What appears as an effect of transactional form,

then, may simply be the effect of hard bargaining by the controller. While this causal story may

provide a partial explanation for the results presented in Part 4.3, it is unlikely to provide a

complete explanation. The reason is that if outcome differences were fully explained by some

other factor (e.g., aggressiveness of the controller), then controllers would be indifferent between

transactional forms, which would mean that controllers should choose transactional form

randomly, which in turn would imply that we should not observe differences by transactional

Stockholder’s representative stated that the Majority Stockholder would not accept that share price, and that if the special committee could not recommend the proposed transaction at $10.30 per share that the Majority Stockholder would withdraw the offer. . . . On November 6, 2002, the special committee met to discuss the Majority Stockholder’s response to the special committee’s attempts to increase the offer price of $10.30 per share. . . . On November 7, the parties announced that the Majority Stockholder and the special committee had reached an agreement with respect to the merger at a price of $10.30 per share in cash, subject to approval by ISP’s board of directors.” See International Specialty Products Schedule 13D.


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