Why takeover premia protect minority shareholders

The compensation offered has to take the intrinsic value of the shares into account; minority shareholders have the right to challenge the compensation offer at a court. This procedure takes several years, and in a number of cases yields substantial increases of the compensation by the court.

Until recently potential bidders had only a vague idea about the cost of the endgame part when aiming to achieve full ownership. This has changed: Over the years the Center for Corporate Transactions and Private Equity CCTPE and the chair for financial management have set up a unique database containing all relevant information for German takeovers since Currently it contains data for takeover offers, including offer premium, bidder toehold, target ownership structure, shares tendered etc.

Additionally the database tracks the further development of these offers during the endgame phase: stock price and ownership structure development after the offer, signing DPLA, squeeze out, compensation offers, court decisions on compensation etc. Based on this database we calculate the total cost of acquisition for German takeover offers and especially shed light on the cost of the endgame. Thus our first results suggest, that the additional cost of endgames in Ger- man corporate takeovers are significant.

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