Logo Logo
Switch Language to English
Schnitzer, Monika (1996): Hostile versus friendly takeovers. In: Economica, Vol. 63, Nr. 249: S. 37-55
Volltext auf 'Open Access LMU' nicht verfügbar.


The paper analyses the choice of a raider between a hostile and a friendly takeover. If the target company’s manager has private information about the scope for efficiency gains, it is shown that the raider may prefer a hostile acquisition even if transaction costs for a friendly takeover are much smaller. The raider actually chooses between a (hostile) tender offer to uninformed shareholders and (friendly) merger negotiations with the informed manager. I show how the uncertainty about potential efficiency gains, the manager’s preference for control, the number of shares held by the manager and transaction costs affect the raider’s choice.