Does the bid premium matter in the shareholders' selling decision?

Abstract

The aim of this paper is to analyse the influence that bid premium has on target shareholders’ decision about selling in a tender offer. Neither empirical evidence nor theoretical models conclusively show that the higher the bid premium is, the higher the probability of bid success will be. In the Spanish market, we are not able to achieve conclusive results either since this influence depends on several variables such as the existence of previous sales agreement between some of the target shareholders and the bidder.