36 M.L.DeFondtandC.W.Park,TheEffectofCompetition
onCEOTurnover,”JournalofAccountingandEconomics 27
(1999): 35–56.
37 This number is often obtained by looking at what
acquiring firms typicallypay in acquisitions asa premium
overthemarketprice(from adatasource likeMergerstat).
Therearetwoproblemswiththisapproach.Thefirstisthat
thepremiumpaidonanacquisitioncanbeforanumberof
different reasons,including synergy.Infact, wecansafely
arguethatifthetypicalpremiumpaidinacquisitions is 25
percent, thevalue ofcontrol has to be muchsmaller. The
secondisthatthereisadangerofaself-fulfillingprophecy;if
thecontrolpremiumisbased onwhatotheracquirershave
paidratherthanonthespecific characteristicsofthetarget
firm, there may be little or no reason for the premium.
38 G. Jarrell and A. Poulsen, “The Returns to Acquiring
Firms in Tender Offers: Evidence from Three Decades,”
Financial Management18 (1989): 12–19.
39 L.H.P.Lang,R.Stulz,andR.A.Walkling,“Managerial
Performance, Tobin’s Q and the Gains from Successful
TenderOffers,”Journal ofFinancialEconomics 24 (1989):
137–154.
40 A. Bhide, “The Causes and Consequences of Hostile
Takeovers,”JournalofAppliedCorporateFinance 2 (1989):
36–59.
41 Vultureinvestorsareusuallyindividualswhobuypoorly
managedfirmsandrestructurethem.E.S.HotchkissandR.
M.Mooradian,“VultureInvestorsandtheMarketforControl