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Predicting Tender Offer Success: A Logistic Analysis

Published online by Cambridge University Press:  06 April 2009

Ralph A. Walkling
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Abstract

This research develops and tests a model for the prediction of tender offer outcomes. Variables that increase the supply of “obtainable shares” (such as increased bid premiums or the payment of solicitation fees) are shown to increase the probability of success. Increased ownership of target firm shares by the bidder also increases the probability of success. Variables that impede the tendering of shares (such as target management opposition or a competing bid) decrease the probability of success. Tests of the model utilizing both linear and logistic analysis support the theoretical constructs and help resolve the paradoxical findings of previous research.

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Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 20 , Issue 4 , December 1985, pp. 461 - 478
Copyright
Copyright © School of Business Administration, University of Washington 1985

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