Academic Journal
Efficient and Inefficient Sales of Corporate Control: The Case of Going Private.
| العنوان: | Efficient and Inefficient Sales of Corporate Control: The Case of Going Private. |
|---|---|
| المؤلفون: | Ofir, Moran1 mofir@idc.ac.il |
| المصدر: | Review of Law & Economics. Mar2019, Vol. 15 Issue 1, pN.PAG-N.PAG. 17p. |
| مصطلحات موضوعية: | *GOING private (Securities), *MAJORITY stockholders, *MINORITY stockholders, *CORPORATION law, *STOCK transfer, EQUAL rights |
| مصطلحات جغرافية: | UNITED States |
| مستخلص: | I analyze the legal rules governing the sale-of-corporate-control in the case of going private transactions and examine whether a controlling shareholder must share the premium associated with sale-of-control. I rely on the framework developed in (Bebchuk, L.A. 1994. "Efficient and Inefficient Sales of Corporate Control," 109 Quarterly Journal of Economics 957–993) regarding these transactions under the adjusted market rule (AMR) enabling different rights for the controlling and minority shareholders, and under the adjusted equal opportunity rule (AEOR) providing equal rights to the minorities and controller. My main findings are that both rules prevent inefficient transfers, since under both the new controller fully internalizes the externality imposed by extracting private benefits of control. However, the AMR is superior in facilitating efficient transfers. This is because the AEOR can prevent efficient transfers, due to the higher price demanded from the buyer in order to compensate both controller and minorities. In consequence, overall, the AMR dominates the AEOR for transactions in which a company is taken private. [ABSTRACT FROM AUTHOR] |
| Copyright of Review of Law & Economics is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) | |
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