The Equal Opportunity Rule in Transfer of Control: A Contractual Model - HAL-SHS - Sciences de l'Homme et de la Société Accéder directement au contenu
Communication Dans Un Congrès Année : 2010

The Equal Opportunity Rule in Transfer of Control: A Contractual Model

Résumé

The equal opportunity rule is seen as protecting investors in the event of a transfer of control. This rule is analyzed in a setting of information asymmetry and future private benefits between the new controlling shareholders and the outside investors. Both parties need to design a new implicit contract to share the firm's ownership. Using a signaling model, we show that the new controlling shareholder issues signals to outside shareholders to deliver private information on the firm's future economic return and his private rate of appropriation. Ownership stake of the controlling shareholder and the premium embedded in the acquisition price are key parameters. In a controlling ownership system, the equal opportunity rule modifies the relative behaviors of controlling and outside shareholders. The quality of information deteriorates despite the fact that the discipline may be stronger.
Fichier principal
Vignette du fichier
Equal_opportunity_rule_signaling_8_.pdf (235.73 Ko) Télécharger le fichier
Origine : Fichiers produits par l'(les) auteur(s)
Loading...

Dates et versions

halshs-00636613 , version 1 (27-10-2011)

Identifiants

  • HAL Id : halshs-00636613 , version 1

Citer

Hubert de La Bruslerie. The Equal Opportunity Rule in Transfer of Control: A Contractual Model. German Law and Economic Association, Dec 2010, Wiesbaden, Germany. ⟨halshs-00636613⟩
89 Consultations
139 Téléchargements

Partager

Gmail Facebook X LinkedIn More