Termination Fees in Mergers and Acquisitions

@article{Officer2003TerminationFI,
  title={Termination Fees in Mergers and Acquisitions},
  author={M. S. Officer},
  journal={Journal of Financial Economics},
  year={2003},
  volume={69},
  pages={431-467}
}
  • M. S. Officer
  • Published 2003
  • Business
  • Journal of Financial Economics
  • The paper provides evidence on the effects of including a target termination fee in a merger contract. I test the implications of the hypothesis that termination fees are used by self-interested target managers to deter competing bids and protect "sweetheart" deals with white knight bidders, presumably resulting in lower premiums for target shareholders. An alternative hypothesis is that target managers use termination fees to encourage bidder participation by ensuring that the bidder is… CONTINUE READING
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