Breaking up is hard to do? An analysis of termination fee provisions and merger outcomes
Article Abstract:
An analysis made on the provisions of termination fee clauses in merger contracts indicate that the fees serve as an efficient contracting device by securing wealth gains in deals where the cost of negotiation and bid failure are relatively higher. Such fees neither reduce shareholders welfare nor are they byproduct of agency problems between shareholders and management.
Publication Name: Journal of Financial Economics
Subject: Economics
ISSN: 0304-405X
Year: 2003
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Takeover bids and target directors' incentives: the impact of a bid on directors' wealth and board seats
Article Abstract:
The effect of a takeover bid on target directors, both in terms of its immediate financial impact and its effect on the number of future board seats held by those target directors are documented. However, for an outside director the impact of a completed merger is significantly negative.
Publication Name: Journal of Financial Economics
Subject: Economics
ISSN: 0304-405X
Year: 2003
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Termination fees in mergers and acquisitions
Article Abstract:
The effects of the inclusion of termination fees in merger contracts is discussed. The evidence that target termination fees are not harmful to stockholders is asserted.
Publication Name: Journal of Financial Economics
Subject: Economics
ISSN: 0304-405X
Year: 2003
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