Market for Corporate Control

The market for corporate control includes any transaction whereby the control of an asset changes hands.  Thus it includes mergers, acquisitions, spin-offs, divestitures, as well as proxy contests.

Mergers are in the news as much as ever.  Benham and Davis author an interesting article from the legal profession on Bidder's Returns and  rationale. There are many other academic articles starting with Jensen and Ruback. 

For a nonacademic view of the current merger wave, read the November 1998 article from the Kansas City Star and Knight-Ridder and an article from the Philadelphia Inquirer. Fortune has an article on 1998 Mergers that Did Not Get Done.  It discusses many of the problems that can arise when companies merge.   The Wall Street Journal also has had several excellent articles in the weeks surrounding Thanksgiving 1998. 

I can not keep up with the mergers, but a few to be aware of  Ford-Volvo and Yahoo-GeoCities,  Ford buying Volvo's car division, TRW and Lucas Varity, and a Joint venture with AT&T and Time-Warner (2/1) or CNN's story on the AT&T-Time Warner transaction.  in the TRW example note the "break-up" fee which must be paid if the deal does not go through. For more evidence the "trends" we spoke of in class (Technology, Globalization, and Deregulation) are not just driving US business deals, take a look at bank mergers in Europe.(link added 2/4/99)

Also see the WSJ articles that I recommend reading.

Spin-offs, divestitures, and equity carveouts also go here.  See class discussion of the Randolph case for information on these.

More merger notes will follow later in the semester.