MOTIVATIONS FOR HOSTILE TENDER OFFERS AND THE MARKET FOR POLITICAL EXCHANGE

This paper reviews the arguments concerning the role of hostile tender offers in today's corporate world. Some observers suggest that "corporate raiders" do not pay shareholders a fair price for their holdings and that they disrupt firms' day-to-day operations. Others point to the significant premiums paid to shareholders in tender offers, and they suggest that raiders play an important role in forcing changes in corporations. The paper also presents the authors' views on the viability of proposed regulations in the corporate control area. Copyright 1986 Western Economic Association International.