TY  - BOOK
AU  - Lambrecht,Bart
AU  - Myers,Stewart C.
ED  - National Bureau of Economic Research.
TI  - A Theory of Takeovers and Disinvestment
T2  - NBER working paper series
PY  - 2005///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - January 2005; Hardcopy version available to institutional subscribers
N2  - We present a real-options model of takeovers and disinvestment in declining industries. As product demand declines, a first-best closure level is reached, where overall value is maximized by shutting down the .rm and releasing its capital to investors. Absent takeovers, managers of unlevered firms always abandon the firm's business too late.  We model the managers' payout policy absent takeovers and consider the effects of golden parachutes and leverage on managers' shut-down decisions. We analyze the effects of takeovers of under-leveraged firms. Takeovers by raiders enforce first-best closure. Hostile takeovers by other firms occur either at the first-best closure point or too early. We also consider management buyouts and mergers of equals and show that in both cases closure happens inefficiently late
UR  - https://www.nber.org/papers/w11082
UR  - http://dx.doi.org/10.3386/w11082
ER  -