Journal of Law, Finance, and Accounting > Vol 6 > Issue 2

The Choice Between Various Freeze-out Procedures and its Consequences

Beni Lauterbach, School of Business Administration, Bar-Ilan University, Israel and ECGI, Belgium, , Evgeny Lyandres, Tel Aviv University Coller School of Management, Israel and Monash University, Australia, , Yevgeny Mugerman, School of Business Administration, Bar-Ilan University, Israel, , Barak Yarkoni, Zvi Meitar Center for Advanced Legal Studies, Tel Aviv University, Israel,
Suggested Citation
Beni Lauterbach, Evgeny Lyandres, Yevgeny Mugerman and Barak Yarkoni (2021), "The Choice Between Various Freeze-out Procedures and its Consequences", Journal of Law, Finance, and Accounting: Vol. 6: No. 2, pp 315-351.

Publication Date: 08 Nov 2021
© 2021 B. Lauterbach, E. Lyandres, Y. Mugerman and B. Yarkoni
International business,  Strategic management,  Corporate finance,  Leadership and governance,  Law and economics,  Economic theory
JEL Codes: G32, G34, G38, K22
Going private transactionscontrolling shareholdersmergerstenderoffers


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In this article:
1. Introduction 
2. Freeze-out Mechanisms 
3. A Model of Freeze-out Tender Offers and Mergers 
4. Sample and Data 
5. Evidence on Freeze-out Mechanisms and their Consequences 
6. Summary and Conclusions 


We develop a model of freeze-out merger and tender offers and test it in an economy where merger and tender regulation are extremely different. Using a relatively large sample of 329 freeze-out offers in Israel during 2000–2019, we document evidence consistent with the model. We also find that tender offers: (1) are the preferred technique; (2) offer lower premiums; and (3) suffer from a relatively large (40%) offer rejection rate. These findings diverge from U.S. evidence, and are partly due to differences in the tender offer procedures. Thus, our study illustrates that the tender offer procedure is a delicate one, and explains why Delaware has often amended it.