2008年1月
The fairness opinion puzzle: Board incentives, information asymmetry, and bidding strategy
JOURNAL OF LEGAL STUDIES
- ,
- 巻
- 37
- 号
- 1
- 開始ページ
- 229
- 終了ページ
- 272
- 記述言語
- 英語
- 掲載種別
- 研究論文(学術雑誌)
- DOI
- 10.1086/519964
- 出版者・発行元
- UNIV CHICAGO PRESS
The proliferation of fairness opinions promulgating "wide as Texas" price ranges is not only a seeming regulatory failure, it is a puzzle: why do 60 percent of target boards solicit seemingly worthless documents not required by law, while 40 percent of their peers do not? This article explains a fairness opinion as "cheap talk" between a board and public shareholders. In the Fairness Opinion Game, a board issues a fairness opinion to communicate with two shareholder generations: existing shareholders voting on the proposed sale of their shares and potential aftermarket buyers who would buy if the present transaction falls through. The game yields two equilibria: one where the board issues no opinions and one where Texas-wide opinions emerge as equilibrium messages. We conclude that three factors determine a fairness opinion's width: the board's private incentives, information asymmetry between the board and shareholders, and transaction costs incurred by aftermarket buyers.
- リンク情報
- ID情報
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- DOI : 10.1086/519964
- ISSN : 0047-2530
- Web of Science ID : WOS:000257518200007