{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,1,20]],"date-time":"2026-01-20T04:04:49Z","timestamp":1768881889166,"version":"3.49.0"},"reference-count":38,"publisher":"MDPI AG","issue":"1","license":[{"start":{"date-parts":[[2024,1,30]],"date-time":"2024-01-30T00:00:00Z","timestamp":1706572800000},"content-version":"vor","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["Games"],"abstract":"<jats:p>This paper develops a dynamic model of tender offers in which there is trading on the target\u2019s shares during the takeover, and bidders can freeze out target shareholders (compulsorily acquire remaining shares not tendered at the bid price), features that prevail on almost all takeovers. We show that trading allows for the entry of arbitrageurs with large blocks of shares who can hold out a freezeout\u2014a threat that forces the bidder to offer a high preemptive bid. There is also a positive relationship between the takeover premium and arbitrageurs\u2019 accumulation of shares before the takeover announcement, and the less liquid the target stock, the stronger this relationship is. Moreover, freezeouts eliminate the free-rider problem, but front-end loaded bids, such as two-tiered and partial offers, do not benefit bidders because arbitrageurs can undo any potential benefit and eliminate the coerciveness of these offers. Similarly, the takeover premium is also largely unrelated to the bidder\u2019s ability to dilute the target\u2019s shareholders after the acquisition, also due to potential arbitrage activity.<\/jats:p>","DOI":"10.3390\/g15010004","type":"journal-article","created":{"date-parts":[[2024,1,30]],"date-time":"2024-01-30T07:49:47Z","timestamp":1706600987000},"page":"4","update-policy":"https:\/\/doi.org\/10.3390\/mdpi_crossmark_policy","source":"Crossref","is-referenced-by-count":2,"title":["Takeovers, Freezeouts, and Risk Arbitrage"],"prefix":"10.3390","volume":"15","author":[{"given":"Armando","family":"Gomes","sequence":"first","affiliation":[{"name":"Olin School of Business, Washington University, St. Louis, MO 63130, USA"}],"role":[{"role":"author","vocabulary":"crossref"}]}],"member":"1968","published-online":{"date-parts":[[2024,1,30]]},"reference":[{"key":"ref_1","doi-asserted-by":"crossref","first-page":"42","DOI":"10.2307\/3003400","article-title":"Takeover Bids, the Free-Rider Problem, and the Theory of the Corporation","volume":"11","author":"Grossman","year":"1980","journal-title":"Bell J. 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