Private Benefits in Corporate Control Transactions

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    This paper presents an analytical framework from which it can be inferred whether sellers or buyers in block transactions value private benefits highest. I am thus able to suggest an answer to the question: Are blocks of shares traded because the buyer has high security benefits, or because the buyer has high private benefits from the control rights that come with the shares? Using voting rights as the vehicle for private benefits, I find that the selling shareholders in block transactions attaches more value to private benefits than the buyers and that toeholds are insignificant for the premium paid.
    Original languageEnglish
    JournalInternational Review of Financial Analysis
    Volume20
    Issue number1
    Pages (from-to)52-58
    ISSN1057-5219
    DOIs
    Publication statusPublished - 2011

    Keywords

    • Private Benefits
    • Corporate Control
    • Voting Power
    • Block Transactions

    Cite this

    @article{f22ad8aee79145d88ec65f4a914caa0a,
    title = "Private Benefits in Corporate Control Transactions",
    abstract = "This paper presents an analytical framework from which it can be inferred whether sellers or buyers in block transactions value private benefits highest. I am thus able to suggest an answer to the question: Are blocks of shares traded because the buyer has high security benefits, or because the buyer has high private benefits from the control rights that come with the shares? Using voting rights as the vehicle for private benefits, I find that the selling shareholders in block transactions attaches more value to private benefits than the buyers and that toeholds are insignificant for the premium paid.",
    keywords = "Private Benefits, Corporate Control, Voting Power, Block Transactions",
    author = "Thomas Poulsen",
    year = "2011",
    doi = "10.1016/j.irfa.2010.10.002",
    language = "English",
    volume = "20",
    pages = "52--58",
    journal = "International Review of Financial Analysis",
    issn = "1057-5219",
    publisher = "Elsevier",
    number = "1",

    }

    Private Benefits in Corporate Control Transactions. / Poulsen, Thomas.

    In: International Review of Financial Analysis, Vol. 20, No. 1, 2011, p. 52-58.

    Research output: Contribution to journalJournal articleResearchpeer-review

    TY - JOUR

    T1 - Private Benefits in Corporate Control Transactions

    AU - Poulsen, Thomas

    PY - 2011

    Y1 - 2011

    N2 - This paper presents an analytical framework from which it can be inferred whether sellers or buyers in block transactions value private benefits highest. I am thus able to suggest an answer to the question: Are blocks of shares traded because the buyer has high security benefits, or because the buyer has high private benefits from the control rights that come with the shares? Using voting rights as the vehicle for private benefits, I find that the selling shareholders in block transactions attaches more value to private benefits than the buyers and that toeholds are insignificant for the premium paid.

    AB - This paper presents an analytical framework from which it can be inferred whether sellers or buyers in block transactions value private benefits highest. I am thus able to suggest an answer to the question: Are blocks of shares traded because the buyer has high security benefits, or because the buyer has high private benefits from the control rights that come with the shares? Using voting rights as the vehicle for private benefits, I find that the selling shareholders in block transactions attaches more value to private benefits than the buyers and that toeholds are insignificant for the premium paid.

    KW - Private Benefits

    KW - Corporate Control

    KW - Voting Power

    KW - Block Transactions

    U2 - 10.1016/j.irfa.2010.10.002

    DO - 10.1016/j.irfa.2010.10.002

    M3 - Journal article

    VL - 20

    SP - 52

    EP - 58

    JO - International Review of Financial Analysis

    JF - International Review of Financial Analysis

    SN - 1057-5219

    IS - 1

    ER -