©2001 Prentice Hall Takeovers, Restructuring, and Corporate Governance, 3/e Weston - 75 –Berkovitch and Khanna (1991) model Tender offer –More desirable for target shareholders as more information is released in tender offers leading to competitive bidding for target –Excessive GP payment will tend to motivate managers to sell firm at too low a gain Mergers — by tying payment to synergy gains in case of mergers, firm avoids misuse of GPs –Other possible alternatives to GPs Stock options exercisable in event of change of control Increased stock ownership by management
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