Transfers of Corporate Control in Firms with Noncontrolling Blockholders
I model the choice between a negotiated block trade and a public tender offer as means of acquiring control in a firm with a large minority blockholder. Potential acquirers differ in their (privately known) value‐creation ability. In equilibrium, block trades are made by lower ability acquirers compared to tender offers. The equal opportunity rule (EOR) and the “freezeout” rule are complements in promoting efficiency of control transfers. Stronger investor protection may hamper value‐increasing takeovers when the EOR is present. The model also delivers predictions about announcement returns and the incidence of block trades and tender offers under different legal regimes.
In this paper the authors model the impact of state ownership as a component of the corporate financial architecture on corporate performance and conduct a cross-country analysis of this effect in order to identify the geopolitical differences. The cross-country analysis is focused on the level of development of the institutional mechanisms, designed to protect minority shareholders. The major findings of the paper are in line with a number of research papers’ results obtained in the developed and emerging markets. The contribution of this paper is the joint analysis of two different factors: state ownership and investor protection level and the development of the corporate performance model taking into account the joint influence of these factors as well as their interrelation.
The article comprehensively considered the protection of the rights of investors in the securities market.