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Opportunities in the M&A Aftermarket: Squeezing Out and Selling Out

2006; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.933609

1556-5068

Christoph Van der Elst, Lientje S. F. Van den Steen,

Firm Innovation and Growth

The first part of this paper gives an overview of the economic rationale of the squeeze-out right and the sell-out right. The squeeze-out right influences the dynamics of a tender offer, encourages the minority shareholders to tender and provides the bidder a tool to drive the free riding minority shareholders out of the company. The sell-out right offers the minority shareholders an instrument to consider the pre-take over value, the bid price and the post-take over value and accordingly to take the decision to use his right. The economic analysis illustrates that the triggering thresholds for a squeeze-out right and a sell-out right should be flexible enough in light of the different ownership structures of companies.