Year: 2024
Type: dissertation
Abstract: This dissertation explores the impact and role of information asymmetry in German takeover offers from multiple perspectives, addressing key questions related to mitigating information asymmetry, moral hazard concerns, and the informational content of stock prices around takeover announcements. The dissertation, which comprises three research papers, provides an analysis of the economic effects of various mechanisms and market behaviors in takeover contexts. First, it investigates the role of Material Adverse Change (MAC) clauses in mitigating information asymmetry, examining their influence on offer premiums and takeover outcomes. By offering acquirers protection against unforeseen negative developments, these clauses are shown to impact both the pricing and success probability of offers. Second, the dissertation highlights minority shareholder exploitation risks through timely delisting offers made by majority shareholders, particularly when target firms are undervalued. This paper reveals how information asymmetry can be leveraged to the detriment of minority shareholders, raising concerns about fair valuation and shareholder protection in such scenarios. Lastly, the dissertation delves into merger arbitrage spreads as indicators of market participants' expectations regarding takeover outcomes. By analyzing the spreads, it demonstrates how these price differences convey information regarding the takeover outcome. Together, these papers provide novel insights into how information asymmetry influences takeover strategies, shareholder dynamics, and market efficiency in the German takeover market.
Author: Pollmann, Philipp
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7154796558