Document Type
Article
Publication Date
Summer 2004
Source Publication
Journal of Applied Business Research
Abstract
In a management buyout (MBO) offer, managers have an incentive to offer stockholders a price low enough to compensate them for the risks of increasing their equity ownership in a highly leveraged buyout firm. As these risks increase, managers are more likely to combine their offer with an anti-takeover measure. These measures do not protect a low offer, but do result in a higher takeover price when managers are unwilling to match a competitive offer. Such measures, then, benefit shareholders.
Comments
Originally published in Journal of Applied Business Research, Volume 20, No. 3 (Summer 2004).
The article was originally published by The Clute Institute. For more information about accessing the definitive published version of this article, consult the journal website at: http://www.cluteinstitute.com/JABRMain.htm