1. A Partial Theory of Takeover Bids.
- Author
-
ASHTON, D. J. and ATKINS, D. R.
- Subjects
PRODUCTION (Economic theory) ,ECONOMIC equilibrium ,TENDER offers ,PRODUCTION management (Manufacturing) ,MERGERS & acquisitions ,ECONOMIC impact ,STOCKHOLDER wealth ,DIVIDEND reinvestment ,PORTFOLIO management (Investments) ,ASSET allocation ,PRODUCTION planning - Abstract
There is a natural separation between production decisions affecting the firm as a whole and individual decisions by each shareholder about his portfolio of securities. The end result of these two types of decisions is normally referred to as a productive exchange equilibrium. At such an equilibrium, no individual wants to adjust his portfolio and no firm can muster majority support for a change in its production plans. This paper presents a partial theory of takeover bids in that it examines the role of a takeover bid as a mechanism by which a simultaneous change in shareholdings and production plans can be achieved. This enables a new production exchange equilibrium to be reached which is preferred by a majority of the shareholders but which is inaccessible without a contingent contract in the form of a takeover bid. [ABSTRACT FROM AUTHOR]
- Published
- 1984
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